519152.BO WACC - Weighted Average Cost of Capital

The WACC of Vadilal Enterprises Ltd (519152.BO) is 12.3%.

The Cost of Equity of Vadilal Enterprises Ltd (519152.BO) is 12.15%.

The Cost of Debt of Vadilal Enterprises Ltd (519152.BO) is 24.25%.

	Range	Selected
Cost of equity	10.20% - 14.10%	12.15%
Tax rate	27.80% - 29.30%	28.55%
Cost of debt	10.50% - 38.00%	24.25%
WACC	10.2% - 14.5%	12.3%

WACC

519152.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.41	0.67

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.20%	14.10%

Tax rate	27.80%	29.30%
Debt/Equity ratio	0.03	0.03
Cost of debt	10.50%	38.00%

After-tax WACC	10.2%	14.5%


Selected WACC	12.3%

519152.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 519152.BO:

cost_of_equity (12.15%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.41) + 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.