522267.BO WACC - Weighted Average Cost of Capital

The WACC of Veejay Lakshmi Engineering Works Ltd (522267.BO) is 14.2%.

The Cost of Equity of Veejay Lakshmi Engineering Works Ltd (522267.BO) is 24.85%.

The Cost of Debt of Veejay Lakshmi Engineering Works Ltd (522267.BO) is 7.65%.

	Range	Selected
Cost of equity	21.50% - 28.20%	24.85%
Tax rate	0.80% - 2.60%	1.70%
Cost of debt	7.00% - 8.30%	7.65%
WACC	12.6% - 15.9%	14.2%

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	1.76	2.18

Additional risk adjustments	0.0%	0.5%
Cost of equity	21.50%	28.20%

Tax rate	0.80%	2.60%
Debt/Equity ratio	1.57	1.57
Cost of debt	7.00%	8.30%

After-tax WACC	12.6%	15.9%


Selected WACC	14.2%

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 (24.85%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.76) + 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.