514036.BO WACC - Weighted Average Cost of Capital
The WACC of Loyal Textile Mills Ltd (514036.BO) is 12.2%.
| Range | Selected | |
| Cost of equity | 15.1% - 18.6% | 16.85% |
| Tax rate | 23.3% - 31.6% | 27.45% |
| Cost of debt | 7.9% - 11.6% | 9.75% |
| WACC | 10.9% - 13.6% | 12.2% |
| 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 | 15.1% | 18.6% |
| Tax rate | 23.3% | 31.6% |
| Debt/Equity ratio | 0.88 | 0.88 |
| Cost of debt | 7.9% | 11.6% |
| After-tax WACC | 10.9% | 13.6% |
| Selected WACC | 12.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 514036.BO | Loyal Textile Mills Ltd | 0.88 | 1.16 | 0.71 |
| 514165.BO | Indian Acrylics Ltd | 1.69 | 0.73 | 0.33 |
| AYMSYNTEX.NS | Aym Syntex Ltd | 0.15 | 0.79 | 0.72 |
| BANSWRAS.NS | Banswara Syntex Ltd | 0.91 | 0.98 | 0.6 |
| BASML.NS | Bannari Amman Spinning Mills Ltd | 1.93 | 1.37 | 0.58 |
| CENTENKA.NS | Century Enka Ltd | 0.05 | 1.42 | 1.37 |
| DAMODARIND.NS | Damodar Industries Ltd | 2.16 | 1.05 | 0.42 |
| GINNIFILA.NS | Ginni Filaments Ltd | 0.21 | 1.48 | 1.29 |
| NITINSPIN.NS | Nitin Spinners Ltd | 0.53 | 1.1 | 0.8 |
| VISHAL.NS | Vishal Fabrics Ltd | 0.73 | 1.14 | 0.75 |
| Low | High | |
| Unlevered beta | 0.67 | 0.73 |
| Relevered beta | 1.15 | 1.4 |
| Adjusted relevered beta | 1.1 | 1.27 |
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.