The WACC of Yuken India Ltd (522108.BO) is 14.1%.
| Range | Selected | |
| Cost of equity | 14.00% - 16.80% | 15.40% |
| Tax rate | 31.50% - 38.80% | 35.15% |
| Cost of debt | 9.00% - 13.50% | 11.25% |
| WACC | 12.7% - 15.4% | 14.1% |
| Category | Low | High |
| Long-term bond rate | 7.5% | 8.0% |
| Equity market risk premium | 6.9% | 7.9% |
| Adjusted beta | 0.93 | 1.04 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 14.00% | 16.80% |
| Tax rate | 31.50% | 38.80% |
| Debt/Equity ratio | 0.19 | 0.19 |
| Cost of debt | 9.00% | 13.50% |
| After-tax WACC | 12.7% | 15.4% |
| Selected WACC | 14.1% | |
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 522108.BO:
cost_of_equity (15.40%) = risk_free_rate (7.75%) + equity_risk_premium (7.40%) * adjusted_beta (0.93) + 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.