The WACC of Mount Shivalik Industries Ltd (507522.BO) is 13.3%.
| Range | Selected | |
| Cost of equity | 14.80% - 29.40% | 22.10% |
| Tax rate | 8.40% - 21.90% | 15.15% |
| Cost of debt | 7.00% - 22.10% | 14.55% |
| WACC | 7.6% - 19.0% | 13.3% |
| Category | Low | High |
| Long-term bond rate | 6.9% | 7.4% |
| Equity market risk premium | 6.9% | 7.9% |
| Adjusted beta | 1.14 | 2.71 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 14.80% | 29.40% |
| Tax rate | 8.40% | 21.90% |
| Debt/Equity ratio | 5.96 | 5.96 |
| Cost of debt | 7.00% | 22.10% |
| After-tax WACC | 7.6% | 19.0% |
| Selected WACC | 13.3% | |
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 507522.BO:
cost_of_equity (22.10%) = risk_free_rate (7.15%) + equity_risk_premium (7.40%) * adjusted_beta (1.14) + 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.