514036.BO WACC - Weighted Average Cost of Capital

The WACC of Loyal Textile Mills Ltd (514036.BO) is 12.2%.

The Cost of Equity of Loyal Textile Mills Ltd (514036.BO) is 16.85%.

The Cost of Debt of Loyal Textile Mills Ltd (514036.BO) is 9.75%.

	Range	Selected
Cost of equity	15.10% - 18.60%	16.85%
Tax rate	23.30% - 31.60%	27.45%
Cost of debt	7.90% - 11.60%	9.75%
WACC	10.9% - 13.6%	12.2%

WACC

514036.BO WACC calculation

Category	Low	High

Long-term bond rate	7.5%	8.0%
Equity market risk premium	6.9%	7.9%
Adjusted beta	1.1	1.27

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.10%	18.60%

Tax rate	23.30%	31.60%
Debt/Equity ratio	0.88	0.88
Cost of debt	7.90%	11.60%

After-tax WACC	10.9%	13.6%


Selected WACC	12.2%

514036.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 514036.BO:

cost_of_equity (16.85%) = risk_free_rate (7.75%) + equity_risk_premium (7.40%) * adjusted_beta (1.1) + 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.