521240.BO WACC - Weighted Average Cost of Capital

The WACC of Sambandam Spinning Mills Ltd (521240.BO) is 16.0%.

The Cost of Equity of Sambandam Spinning Mills Ltd (521240.BO) is 24.80%.

The Cost of Debt of Sambandam Spinning Mills Ltd (521240.BO) is 18.25%.

	Range	Selected
Cost of equity	18.20% - 31.40%	24.80%
Tax rate	25.60% - 28.10%	26.85%
Cost of debt	9.60% - 26.90%	18.25%
WACC	9.8% - 22.3%	16.0%

WACC

521240.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.37	2.53

Additional risk adjustments	0.0%	0.5%
Cost of equity	18.20%	31.40%

Tax rate	25.60%	28.10%
Debt/Equity ratio	3.11	3.11
Cost of debt	9.60%	26.90%

After-tax WACC	9.8%	22.3%


Selected WACC	16.0%

521240.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 521240.BO:

cost_of_equity (24.80%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.37) + 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.