521151.BO WACC - Weighted Average Cost of Capital

The WACC of Dhanlaxmi Fabrics Ltd (521151.BO) is 11.3%.

The Cost of Equity of Dhanlaxmi Fabrics Ltd (521151.BO) is 11.40%.

The Cost of Debt of Dhanlaxmi Fabrics Ltd (521151.BO) is 6.70%.

	Range	Selected
Cost of equity	10.10% - 12.70%	11.40%
Tax rate	11.70% - 22.80%	17.25%
Cost of debt	6.40% - 7.00%	6.70%
WACC	10.0% - 12.5%	11.3%

WACC

521151.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.39	0.52

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.10%	12.70%

Tax rate	11.70%	22.80%
Debt/Equity ratio	0.03	0.03
Cost of debt	6.40%	7.00%

After-tax WACC	10.0%	12.5%


Selected WACC	11.3%

521151.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 521151.BO:

cost_of_equity (11.40%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.39) + 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.