521240.BO WACC - Weighted Average Cost of Capital

The WACC of Sambandam Spinning Mills Ltd (521240.BO) is 15.0%.

The Cost of Equity of Sambandam Spinning Mills Ltd (521240.BO) is 18.35%.

The Cost of Debt of Sambandam Spinning Mills Ltd (521240.BO) is 18.45%.

	Range	Selected
Cost of equity	15.00% - 21.70%	18.35%
Tax rate	25.20% - 28.10%	26.65%
Cost of debt	10.00% - 26.90%	18.45%
WACC	10.0% - 20.1%	15.0%

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	0.98	1.48

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.00%	21.70%

Tax rate	25.20%	28.10%
Debt/Equity ratio	2.07	2.07
Cost of debt	10.00%	26.90%

After-tax WACC	10.0%	20.1%


Selected WACC	15.0%

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 (18.35%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.98) + 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.