522257.BO WACC - Weighted Average Cost of Capital

The WACC of Rajoo Engineers Ltd (522257.BO) is 17.4%.

The Cost of Equity of Rajoo Engineers Ltd (522257.BO) is 14.70%.

The Cost of Debt of Rajoo Engineers Ltd (522257.BO) is 179.45%.

	Range	Selected
Cost of equity	13.30% - 16.10%	14.70%
Tax rate	24.50% - 25.10%	24.80%
Cost of debt	7.50% - 351.40%	179.45%
WACC	13.1% - 21.7%	17.4%

WACC

522257.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.77	0.88

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.30%	16.10%

Tax rate	24.50%	25.10%
Debt/Equity ratio	0.02	0.02
Cost of debt	7.50%	351.40%

After-tax WACC	13.1%	21.7%


Selected WACC	17.4%

522257.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 522257.BO:

cost_of_equity (14.70%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.77) + 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.