505737.BO
International Combustion (India) Ltd
Price:  
851.75 
INR
Volume:  
2,990.00
India | Machinery
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505737.BO WACC - Weighted Average Cost of Capital

The WACC of International Combustion (India) Ltd (505737.BO) is 16.7%.

The Cost of Equity of International Combustion (India) Ltd (505737.BO) is 17.65%.
The Cost of Debt of International Combustion (India) Ltd (505737.BO) is 13.65%.

Range Selected
Cost of equity 16.40% - 18.90% 17.65%
Tax rate 21.60% - 25.60% 23.60%
Cost of debt 8.60% - 18.70% 13.65%
WACC 15.1% - 18.2% 16.7%
WACC

505737.BO WACC calculation

Category Low High
Long-term bond rate 6.9% 7.4%
Equity market risk premium 8.3% 9.3%
Adjusted beta 1.15 1.19
Additional risk adjustments 0.0% 0.5%
Cost of equity 16.40% 18.90%
Tax rate 21.60% 25.60%
Debt/Equity ratio 0.16 0.16
Cost of debt 8.60% 18.70%
After-tax WACC 15.1% 18.2%
Selected WACC 16.7%

505737.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 505737.BO:

cost_of_equity (17.65%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.15) + 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.