507998.BO
Simmonds Marshall Ltd
Price:  
145.50 
INR
Volume:  
22,493.00
India | Machinery
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507998.BO WACC - Weighted Average Cost of Capital

The WACC of Simmonds Marshall Ltd (507998.BO) is 16.2%.

The Cost of Equity of Simmonds Marshall Ltd (507998.BO) is 19.30%.
The Cost of Debt of Simmonds Marshall Ltd (507998.BO) is 10.10%.

Range Selected
Cost of equity 17.90% - 20.70% 19.30%
Tax rate 0.30% - 0.60% 0.45%
Cost of debt 9.70% - 10.50% 10.10%
WACC 15.1% - 17.2% 16.2%
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 1.33 1.38
Additional risk adjustments 0.0% 0.5%
Cost of equity 17.90% 20.70%
Tax rate 0.30% 0.60%
Debt/Equity ratio 0.51 0.51
Cost of debt 9.70% 10.50%
After-tax WACC 15.1% 17.2%
Selected WACC 16.2%

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 (19.30%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.33) + 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.