522281.BO WACC - Weighted Average Cost of Capital
The WACC of Ram Ratna Wires Ltd (522281.BO) is 12.8%.
| Range | Selected | |
| Cost of equity | 14.1% - 17.1% | 15.6% |
| Tax rate | 25.5% - 29.5% | 27.5% |
| Cost of debt | 9.1% - 13.5% | 11.3% |
| WACC | 11.4% - 14.2% | 12.8% |
| Category | Low | High |
| Long-term bond rate | 7.5% | 8.0% |
| Equity market risk premium | 6.9% | 7.9% |
| Adjusted beta | 0.96 | 1.08 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 14.1% | 17.1% |
| Tax rate | 25.5% | 29.5% |
| Debt/Equity ratio | 0.61 | 0.61 |
| Cost of debt | 9.1% | 13.5% |
| After-tax WACC | 11.4% | 14.2% |
| Selected WACC | 12.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 522281.BO | Ram Ratna Wires Ltd | 0.61 | 1.28 | 0.88 |
| 504341.BO | Ravindra Energy Ltd | 0.07 | 0.28 | 0.27 |
| BBL.NS | Bharat Bijlee Ltd | 0.02 | 1.89 | 1.86 |
| BHAGYANGR.NS | Bhagyanagar India Ltd | 0.91 | 1.26 | 0.75 |
| CMICABLES.NS | CMI Ltd | 74.74 | 0.09 | 0 |
| HBLPOWER.NS | HBL Power Systems Ltd | 0.01 | 0.85 | 0.85 |
| HPL.NS | HPL Electric & Power Ltd | 0.16 | 1.4 | 1.25 |
| PARACABLES.NS | Paramount Communications Ltd | 0.02 | 1.77 | 1.75 |
| PRECWIRE.NS | Precision Wires India Ltd | 0.02 | 1.98 | 1.95 |
| UNIVCABLES.NS | Universal Cables Ltd | 0.31 | 1.29 | 1.04 |
| Low | High | |
| Unlevered beta | 0.87 | 1.12 |
| Relevered beta | 0.94 | 1.12 |
| Adjusted relevered beta | 0.96 | 1.08 |
522281.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 522281.BO:
cost_of_equity (15.60%) = risk_free_rate (7.75%) + equity_risk_premium (7.40%) * adjusted_beta (0.96) + 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.