520123.BO WACC - Weighted Average Cost of Capital

The WACC of ABC India Ltd (520123.BO) is 17.5%.

The Cost of Equity of ABC India Ltd (520123.BO) is 18.45%.

The Cost of Debt of ABC India Ltd (520123.BO) is 18.70%.

	Range	Selected
Cost of equity	15.90% - 21.00%	18.45%
Tax rate	11.00% - 17.10%	14.05%
Cost of debt	10.50% - 26.90%	18.70%
WACC	13.6% - 21.4%	17.5%

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	1.09	1.41

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.90%	21.00%

Tax rate	11.00%	17.10%
Debt/Equity ratio	0.56	0.56
Cost of debt	10.50%	26.90%

After-tax WACC	13.6%	21.4%


Selected WACC	17.5%

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 (18.45%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.09) + 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.