522267.BO WACC - Weighted Average Cost of Capital

The WACC of Veejay Lakshmi Engineering Works Ltd (522267.BO) is 17.1%.

The Cost of Equity of Veejay Lakshmi Engineering Works Ltd (522267.BO) is 17.85%.

The Cost of Debt of Veejay Lakshmi Engineering Works Ltd (522267.BO) is 17.90%.

	Range	Selected
Cost of equity	15.90% - 19.80%	17.85%
Tax rate	3.40% - 10.50%	6.95%
Cost of debt	8.90% - 26.90%	17.90%
WACC	12.4% - 21.9%	17.1%

WACC

522267.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.09	1.28

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.90%	19.80%

Tax rate	3.40%	10.50%
Debt/Equity ratio	0.95	0.95
Cost of debt	8.90%	26.90%

After-tax WACC	12.4%	21.9%


Selected WACC	17.1%

522267.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 522267.BO:

cost_of_equity (17.85%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.09) + 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.