507817.BO WACC - Weighted Average Cost of Capital

The WACC of Wires and Fabriks (SA) Ltd (507817.BO) is 11.1%.

The Cost of Equity of Wires and Fabriks (SA) Ltd (507817.BO) is 17.40%.

The Cost of Debt of Wires and Fabriks (SA) Ltd (507817.BO) is 12.50%.

	Range	Selected
Cost of equity	14.70% - 20.10%	17.40%
Tax rate	22.50% - 37.20%	29.85%
Cost of debt	6.40% - 18.60%	12.50%
WACC	7.9% - 14.3%	11.1%

WACC

507817.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.94	1.31

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.70%	20.10%

Tax rate	22.50%	37.20%
Debt/Equity ratio	2.3	2.3
Cost of debt	6.40%	18.60%

After-tax WACC	7.9%	14.3%


Selected WACC	11.1%

507817.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 507817.BO:

cost_of_equity (17.40%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.94) + 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.