502958.BO WACC - Weighted Average Cost of Capital

The WACC of Lakshmi Mills Company Ltd (502958.BO) is 12.1%.

The Cost of Equity of Lakshmi Mills Company Ltd (502958.BO) is 12.15%.

The Cost of Debt of Lakshmi Mills Company Ltd (502958.BO) is 17.30%.

	Range	Selected
Cost of equity	11.00% - 13.30%	12.15%
Tax rate	29.80% - 33.00%	31.40%
Cost of debt	10.70% - 23.90%	17.30%
WACC	10.2% - 14.0%	12.1%

WACC

502958.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.5	0.59

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.00%	13.30%

Tax rate	29.80%	33.00%
Debt/Equity ratio	0.32	0.32
Cost of debt	10.70%	23.90%

After-tax WACC	10.2%	14.0%


Selected WACC	12.1%

502958.BO's CAPM model and how its cost of Equity is calculated

The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.

This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.

Here’s how we figure out the cost of equity for 502958.BO:

cost_of_equity (12.15%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.5) + risk_adjustments (0.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.