507474.BO WACC - Weighted Average Cost of Capital

The WACC of Kothari Fermentation and Biochem Ltd (507474.BO) is 15.3%.

The Cost of Equity of Kothari Fermentation and Biochem Ltd (507474.BO) is 17.65%.

The Cost of Debt of Kothari Fermentation and Biochem Ltd (507474.BO) is 17.15%.

	Range	Selected
Cost of equity	15.60% - 19.70%	17.65%
Tax rate	21.80% - 28.50%	25.15%
Cost of debt	7.40% - 26.90%	17.15%
WACC	11.1% - 19.5%	15.3%

WACC

507474.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.05	1.27

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.60%	19.70%

Tax rate	21.80%	28.50%
Debt/Equity ratio	0.84	0.84
Cost of debt	7.40%	26.90%

After-tax WACC	11.1%	19.5%


Selected WACC	15.3%

507474.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 507474.BO:

cost_of_equity (17.65%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.05) + 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.