521240.BO WACC - Weighted Average Cost of Capital

The WACC of Sambandam Spinning Mills Ltd (521240.BO) is 15.7%.

The Cost of Equity of Sambandam Spinning Mills Ltd (521240.BO) is 18.65%.

The Cost of Debt of Sambandam Spinning Mills Ltd (521240.BO) is 18.60%.

	Range	Selected
Cost of equity	16.00% - 21.30%	18.65%
Tax rate	22.30% - 25.30%	23.80%
Cost of debt	10.30% - 26.90%	18.60%
WACC	10.9% - 20.5%	15.7%

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	1.1	1.44

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.00%	21.30%

Tax rate	22.30%	25.30%
Debt/Equity ratio	1.79	1.79
Cost of debt	10.30%	26.90%

After-tax WACC	10.9%	20.5%


Selected WACC	15.7%

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 (18.65%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.1) + 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.