517500.BO WACC - Weighted Average Cost of Capital

The WACC of Roto Pumps Ltd (517500.BO) is 14.3%.

The Cost of Equity of Roto Pumps Ltd (517500.BO) is 14.45%.

The Cost of Debt of Roto Pumps Ltd (517500.BO) is 7.30%.

	Range	Selected
Cost of equity	12.50% - 16.40%	14.45%
Tax rate	27.50% - 31.60%	29.55%
Cost of debt	6.40% - 8.20%	7.30%
WACC	12.3% - 16.2%	14.3%

WACC

517500.BO WACC calculation

Category	Low	High

Long-term bond rate	7.5%	8.0%
Equity market risk premium	6.9%	7.9%
Adjusted beta	0.71	1

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.50%	16.40%

Tax rate	27.50%	31.60%
Debt/Equity ratio	0.02	0.02
Cost of debt	6.40%	8.20%

After-tax WACC	12.3%	16.2%


Selected WACC	14.3%

517500.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 517500.BO:

cost_of_equity (14.45%) = risk_free_rate (7.75%) + equity_risk_premium (7.40%) * adjusted_beta (0.71) + 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.