513005.BO WACC - Weighted Average Cost of Capital

The WACC of VBC Ferro Alloys Ltd (513005.BO) is 10.6%.

The Cost of Equity of VBC Ferro Alloys Ltd (513005.BO) is 12.20%.

The Cost of Debt of VBC Ferro Alloys Ltd (513005.BO) is 5.50%.

	Range	Selected
Cost of equity	9.80% - 14.60%	12.20%
Tax rate	0.50% - 6.70%	3.60%
Cost of debt	4.00% - 7.00%	5.50%
WACC	8.5% - 12.8%	10.6%

WACC

513005.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.35	0.73

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.80%	14.60%

Tax rate	0.50%	6.70%
Debt/Equity ratio	0.29	0.29
Cost of debt	4.00%	7.00%

After-tax WACC	8.5%	12.8%


Selected WACC	10.6%

513005.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 513005.BO:

cost_of_equity (12.20%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.35) + 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.