511626.BO WACC - Weighted Average Cost of Capital

The WACC of R R Financial Consultants Ltd (511626.BO) is 12.1%.

The Cost of Equity of R R Financial Consultants Ltd (511626.BO) is 13.05%.

The Cost of Debt of R R Financial Consultants Ltd (511626.BO) is 6.55%.

	Range	Selected
Cost of equity	11.10% - 15.00%	13.05%
Tax rate	13.30% - 18.70%	16.00%
Cost of debt	5.60% - 7.50%	6.55%
WACC	10.3% - 13.9%	12.1%

WACC

511626.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.51	0.77

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.10%	15.00%

Tax rate	13.30%	18.70%
Debt/Equity ratio	0.14	0.14
Cost of debt	5.60%	7.50%

After-tax WACC	10.3%	13.9%


Selected WACC	12.1%

511626.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 511626.BO:

cost_of_equity (13.05%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.51) + 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.