514036.BO
Loyal Textile Mills Ltd
Price:  
342.2 
INR
Volume:  
221
India | Textiles, Apparel & Luxury Goods

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%.

RangeSelected
Cost of equity15.1% - 18.6%16.85%
Tax rate23.3% - 31.6%27.45%
Cost of debt7.9% - 11.6%9.75%
WACC10.9% - 13.6%12.2%
WACC

514036.BO WACC calculation

CategoryLowHigh
Long-term bond rate7.5%8.0%
Equity market risk premium6.9%7.9%
Adjusted beta1.11.27
Additional risk adjustments0.0%0.5%
Cost of equity15.1%18.6%
Tax rate23.3%31.6%
Debt/Equity ratio
0.880.88
Cost of debt7.9%11.6%
After-tax WACC10.9%13.6%
Selected WACC12.2%

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.