507474.BO WACC - Weighted Average Cost of Capital

The WACC of Kothari Fermentation and Biochem Ltd (507474.BO) is 11.8%.

The Cost of Equity of Kothari Fermentation and Biochem Ltd (507474.BO) is 13.60%.

The Cost of Debt of Kothari Fermentation and Biochem Ltd (507474.BO) is 10.10%.

	Range	Selected
Cost of equity	11.10% - 16.10%	13.60%
Tax rate	27.80% - 31.10%	29.45%
Cost of debt	8.10% - 12.10%	10.10%
WACC	9.6% - 13.9%	11.8%

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	0.51	0.88

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.10%	16.10%

Tax rate	27.80%	31.10%
Debt/Equity ratio	0.39	0.39
Cost of debt	8.10%	12.10%

After-tax WACC	9.6%	13.9%


Selected WACC	11.8%

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 (13.60%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.51) + 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.