526117.BO WACC - Weighted Average Cost of Capital

The WACC of Shervani Industrial Syndicate Ltd (526117.BO) is 14.7%.

The Cost of Equity of Shervani Industrial Syndicate Ltd (526117.BO) is 13.15%.

The Cost of Debt of Shervani Industrial Syndicate Ltd (526117.BO) is 20.65%.

	Range	Selected
Cost of equity	11.50% - 14.80%	13.15%
Tax rate	7.60% - 13.50%	10.55%
Cost of debt	14.40% - 26.90%	20.65%
WACC	12.0% - 17.4%	14.7%

WACC

526117.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.56	0.75

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.50%	14.80%

Tax rate	7.60%	13.50%
Debt/Equity ratio	0.44	0.44
Cost of debt	14.40%	26.90%

After-tax WACC	12.0%	17.4%


Selected WACC	14.7%

526117.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 526117.BO:

cost_of_equity (13.15%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.56) + 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.