520123.BO WACC - Weighted Average Cost of Capital

The WACC of ABC India Ltd (520123.BO) is 15.4%.

The Cost of Equity of ABC India Ltd (520123.BO) is 17.60%.

The Cost of Debt of ABC India Ltd (520123.BO) is 11.35%.

	Range	Selected
Cost of equity	15.70% - 19.50%	17.60%
Tax rate	4.50% - 8.90%	6.70%
Cost of debt	10.50% - 12.20%	11.35%
WACC	13.9% - 16.9%	15.4%

WACC

520123.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.06	1.25

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.70%	19.50%

Tax rate	4.50%	8.90%
Debt/Equity ratio	0.45	0.45
Cost of debt	10.50%	12.20%

After-tax WACC	13.9%	16.9%


Selected WACC	15.4%

520123.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 520123.BO:

cost_of_equity (17.60%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.06) + 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.