508969.BO WACC - Weighted Average Cost of Capital

The WACC of Sulabh Engineers and Services Ltd (508969.BO) is 10.0%.

The Cost of Equity of Sulabh Engineers and Services Ltd (508969.BO) is 10.15%.

The Cost of Debt of Sulabh Engineers and Services Ltd (508969.BO) is 7.50%.

	Range	Selected
Cost of equity	9.20% - 11.10%	10.15%
Tax rate	14.50% - 18.60%	16.55%
Cost of debt	7.50% - 7.50%	7.50%
WACC	9.1% - 11.0%	10.0%

WACC

508969.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.28	0.35

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.20%	11.10%

Tax rate	14.50%	18.60%
Debt/Equity ratio	0.03	0.03
Cost of debt	7.50%	7.50%

After-tax WACC	9.1%	11.0%


Selected WACC	10.0%

508969.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 508969.BO:

cost_of_equity (10.15%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.28) + 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.