506414.BO WACC - Weighted Average Cost of Capital
The WACC of Fermenta Biotech Ltd (506414.BO) is 12.7%.
| Range | Selected | |
| Cost of equity | 11.8% - 15.6% | 13.7% |
| Tax rate | 15.3% - 28.2% | 21.75% |
| Cost of debt | 7.8% - 8.3% | 8.05% |
| WACC | 11.1% - 14.3% | 12.7% |
| Category | Low | High |
| Long-term bond rate | 6.9% | 7.4% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 0.6 | 0.83 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 11.8% | 15.6% |
| Tax rate | 15.3% | 28.2% |
| Debt/Equity ratio | 0.16 | 0.16 |
| Cost of debt | 7.8% | 8.3% |
| After-tax WACC | 11.1% | 14.3% |
| Selected WACC | 12.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 506414.BO | Fermenta Biotech Ltd | 0.16 | 0.35 | 0.31 |
| 506260.BO | Anuh Pharma Ltd | 0 | 0.57 | 0.57 |
| 541400.BO | Zim Laboratories Ltd | 0.11 | 0.35 | 0.32 |
| BALPHARMA.NS | Bal Pharma Ltd | 0.9 | 0.35 | 0.2 |
| GUFICBIO.NS | Gufic Biosciences Ltd | 0.02 | 1.05 | 1.04 |
| INDSWFTLTD.NS | Ind Swift Ltd | 12.71 | 1 | 0.09 |
| KOPRAN.NS | Kopran Ltd | 0.11 | 1.42 | 1.3 |
| LINCOLN.NS | Lincoln Pharmaceuticals Ltd | 0 | 1.91 | 1.9 |
| VENUSREM.NS | Venus Remedies Ltd | 0.09 | 0.85 | 0.8 |
| ZOTA.NS | Zota Health Care Ltd | 0.03 | 0.39 | 0.38 |
| Low | High | |
| Unlevered beta | 0.35 | 0.66 |
| Relevered beta | 0.4 | 0.75 |
| Adjusted relevered beta | 0.6 | 0.83 |
506414.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 506414.BO:
cost_of_equity (13.70%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.6) + 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.