508494.BO
Warren Tea Ltd
Price:  
58.53 
INR
Volume:  
1,963.00
India | Food Products
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508494.BO WACC - Weighted Average Cost of Capital

The WACC of Warren Tea Ltd (508494.BO) is 13.8%.

The Cost of Equity of Warren Tea Ltd (508494.BO) is 14.00%.
The Cost of Debt of Warren Tea Ltd (508494.BO) is 5.00%.

Range Selected
Cost of equity 12.20% - 15.80% 14.00%
Tax rate 30.00% - 30.00% 30.00%
Cost of debt 5.00% - 5.00% 5.00%
WACC 12.0% - 15.5% 13.8%
WACC

508494.BO WACC calculation

Category Low High
Long-term bond rate 6.9% 7.4%
Equity market risk premium 8.3% 9.3%
Adjusted beta 0.64 0.85
Additional risk adjustments 0.0% 0.5%
Cost of equity 12.20% 15.80%
Tax rate 30.00% 30.00%
Debt/Equity ratio 0.02 0.02
Cost of debt 5.00% 5.00%
After-tax WACC 12.0% 15.5%
Selected WACC 13.8%

508494.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 508494.BO:

cost_of_equity (14.00%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.64) + 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.