522281.BO WACC - Weighted Average Cost of Capital

The WACC of Ram Ratna Wires Ltd (522281.BO) is 12.8%.

The Cost of Equity of Ram Ratna Wires Ltd (522281.BO) is 15.60%.

The Cost of Debt of Ram Ratna Wires Ltd (522281.BO) is 11.30%.

	Range	Selected
Cost of equity	14.10% - 17.10%	15.60%
Tax rate	25.50% - 29.50%	27.50%
Cost of debt	9.10% - 13.50%	11.30%
WACC	11.4% - 14.2%	12.8%

WACC

522281.BO WACC calculation

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	14.10%	17.10%

Tax rate	25.50%	29.50%
Debt/Equity ratio	0.61	0.61
Cost of debt	9.10%	13.50%

After-tax WACC	11.4%	14.2%


Selected WACC	12.8%

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.