521131.BO WACC - Weighted Average Cost of Capital

The WACC of Shree Bhavya Fabrics Ltd (521131.BO) is 11.3%.

The Cost of Equity of Shree Bhavya Fabrics Ltd (521131.BO) is 19.85%.

The Cost of Debt of Shree Bhavya Fabrics Ltd (521131.BO) is 10.70%.

	Range	Selected
Cost of equity	16.10% - 23.60%	19.85%
Tax rate	23.20% - 25.80%	24.50%
Cost of debt	10.00% - 11.40%	10.70%
WACC	10.0% - 12.6%	11.3%

WACC

521131.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.11	1.69

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.10%	23.60%

Tax rate	23.20%	25.80%
Debt/Equity ratio	2.61	2.61
Cost of debt	10.00%	11.40%

After-tax WACC	10.0%	12.6%


Selected WACC	11.3%

521131.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 521131.BO:

cost_of_equity (19.85%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.11) + 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.