507998.BO WACC - Weighted Average Cost of Capital

The WACC of Simmonds Marshall Ltd (507998.BO) is 16.3%.

The Cost of Equity of Simmonds Marshall Ltd (507998.BO) is 19.90%.

The Cost of Debt of Simmonds Marshall Ltd (507998.BO) is 11.50%.

	Range	Selected
Cost of equity	18.10% - 21.70%	19.90%
Tax rate	0.80% - 1.70%	1.25%
Cost of debt	10.90% - 12.10%	11.50%
WACC	15.0% - 17.6%	16.3%

WACC

507998.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.35	1.48

Additional risk adjustments	0.0%	0.5%
Cost of equity	18.10%	21.70%

Tax rate	0.80%	1.70%
Debt/Equity ratio	0.71	0.71
Cost of debt	10.90%	12.10%

After-tax WACC	15.0%	17.6%


Selected WACC	16.3%

507998.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 507998.BO:

cost_of_equity (19.90%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.35) + 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.