505036.BO WACC - Weighted Average Cost of Capital

The WACC of Automobile Corp Of Goa Ltd (505036.BO) is 16.4%.

The Cost of Equity of Automobile Corp Of Goa Ltd (505036.BO) is 17.25%.

The Cost of Debt of Automobile Corp Of Goa Ltd (505036.BO) is 5.75%.

	Range	Selected
Cost of equity	16.10% - 18.40%	17.25%
Tax rate	24.20% - 24.90%	24.55%
Cost of debt	4.00% - 7.50%	5.75%
WACC	15.2% - 17.6%	16.4%

WACC

505036.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.11	1.13

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.10%	18.40%

Tax rate	24.20%	24.90%
Debt/Equity ratio	0.07	0.07
Cost of debt	4.00%	7.50%

After-tax WACC	15.2%	17.6%


Selected WACC	16.4%

505036.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 505036.BO:

cost_of_equity (17.25%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.11) + 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.