513472.BO WACC - Weighted Average Cost of Capital

The WACC of Simplex Castings Ltd (513472.BO) is 10.8%.

The Cost of Equity of Simplex Castings Ltd (513472.BO) is 11.60%.

The Cost of Debt of Simplex Castings Ltd (513472.BO) is 11.55%.

	Range	Selected
Cost of equity	9.90% - 13.30%	11.60%
Tax rate	21.90% - 23.90%	22.90%
Cost of debt	10.00% - 13.10%	11.55%
WACC	9.3% - 12.3%	10.8%

WACC

513472.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.37	0.58

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.90%	13.30%

Tax rate	21.90%	23.90%
Debt/Equity ratio	0.43	0.43
Cost of debt	10.00%	13.10%

After-tax WACC	9.3%	12.3%


Selected WACC	10.8%

513472.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 513472.BO:

cost_of_equity (11.60%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.37) + 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.