522257.BO WACC - Weighted Average Cost of Capital

The WACC of Rajoo Engineers Ltd (522257.BO) is 13.7%.

The Cost of Equity of Rajoo Engineers Ltd (522257.BO) is 13.70%.

The Cost of Debt of Rajoo Engineers Ltd (522257.BO) is 32.80%.

	Range	Selected
Cost of equity	12.10% - 15.30%	13.70%
Tax rate	24.50% - 25.60%	25.05%
Cost of debt	7.50% - 58.10%	32.80%
WACC	12.1% - 15.3%	13.7%

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	0.63	0.8

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.10%	15.30%

Tax rate	24.50%	25.60%
Debt/Equity ratio	0	0
Cost of debt	7.50%	58.10%

After-tax WACC	12.1%	15.3%


Selected WACC	13.7%

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 (13.70%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.63) + 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.