505283.BO
Kirloskar Pneumatic Company Ltd
Price:  
1,197.90 
INR
Volume:  
9,681.00
India | Machinery
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505283.BO WACC - Weighted Average Cost of Capital

The WACC of Kirloskar Pneumatic Company Ltd (505283.BO) is 14.5%.

The Cost of Equity of Kirloskar Pneumatic Company Ltd (505283.BO) is 14.50%.
The Cost of Debt of Kirloskar Pneumatic Company Ltd (505283.BO) is 26.85%.

Range Selected
Cost of equity 13.30% - 15.70% 14.50%
Tax rate 25.60% - 27.80% 26.70%
Cost of debt 8.10% - 45.60% 26.85%
WACC 13.3% - 15.7% 14.5%
WACC

505283.BO WACC calculation

Category Low High
Long-term bond rate 7.4% 7.9%
Equity market risk premium 6.9% 7.9%
Adjusted beta 0.85 0.92
Additional risk adjustments 0.0% 0.5%
Cost of equity 13.30% 15.70%
Tax rate 25.60% 27.80%
Debt/Equity ratio 0 0
Cost of debt 8.10% 45.60%
After-tax WACC 13.3% 15.7%
Selected WACC 14.5%

505283.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 505283.BO:

cost_of_equity (14.50%) = risk_free_rate (7.65%) + equity_risk_premium (7.40%) * adjusted_beta (0.85) + 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.