504988.BO
Welcast Steels Ltd
Price:  
1,278.05 
INR
Volume:  
23
India | Metals & Mining

504988.BO WACC - Weighted Average Cost of Capital

The WACC of Welcast Steels Ltd (504988.BO) is 13.2%.

The Cost of Equity of Welcast Steels Ltd (504988.BO) is 16.9%.
The Cost of Debt of Welcast Steels Ltd (504988.BO) is 11%.

RangeSelected
Cost of equity14.1% - 19.7%16.9%
Tax rate9.6% - 16.2%12.9%
Cost of debt7.0% - 15.0%11%
WACC10.2% - 16.1%13.2%
WACC

504988.BO WACC calculation

CategoryLowHigh
Long-term bond rate6.9%7.4%
Equity market risk premium8.3%9.3%
Adjusted beta0.871.27
Additional risk adjustments0.0%0.5%
Cost of equity14.1%19.7%
Tax rate9.6%16.2%
Debt/Equity ratio
11
Cost of debt7.0%15.0%
After-tax WACC10.2%16.1%
Selected WACC13.2%

504988.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 504988.BO:

cost_of_equity (16.90%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.87) + 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.