519566.BO WACC - Weighted Average Cost of Capital

The WACC of Simran Farms Ltd (519566.BO) is 11.1%.

The Cost of Equity of Simran Farms Ltd (519566.BO) is 13.90%.

The Cost of Debt of Simran Farms Ltd (519566.BO) is 5.50%.

	Range	Selected
Cost of equity	11.70% - 16.10%	13.90%
Tax rate	17.00% - 30.50%	23.75%
Cost of debt	4.00% - 7.00%	5.50%
WACC	9.3% - 12.9%	11.1%

WACC

519566.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.58	0.88

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.70%	16.10%

Tax rate	17.00%	30.50%
Debt/Equity ratio	0.4	0.4
Cost of debt	4.00%	7.00%

After-tax WACC	9.3%	12.9%


Selected WACC	11.1%

519566.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 519566.BO:

cost_of_equity (13.90%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.58) + 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.