513566.BO WACC - Weighted Average Cost of Capital

The WACC of Nova Iron and Steel Ltd (513566.BO) is 99.4%.

The Cost of Equity of Nova Iron and Steel Ltd (513566.BO) is 14.45%.

The Cost of Debt of Nova Iron and Steel Ltd (513566.BO) is 123.60%.

	Range	Selected
Cost of equity	12.40% - 16.50%	14.45%
Tax rate	1.80% - 3.50%	2.65%
Cost of debt	24.30% - 222.90%	123.60%
WACC	21.7% - 177.1%	99.4%

WACC

513566.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	6.9%	7.9%
Adjusted beta	0.8	1.08

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.40%	16.50%

Tax rate	1.80%	3.50%
Debt/Equity ratio	4.22	4.22
Cost of debt	24.30%	222.90%

After-tax WACC	21.7%	177.1%


Selected WACC	99.4%

513566.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 513566.BO:

cost_of_equity (14.45%) = risk_free_rate (7.15%) + equity_risk_premium (7.40%) * adjusted_beta (0.8) + 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.