526117.BO WACC - Weighted Average Cost of Capital

The WACC of Shervani Industrial Syndicate Ltd (526117.BO) is 12.0%.

The Cost of Equity of Shervani Industrial Syndicate Ltd (526117.BO) is 12.90%.

The Cost of Debt of Shervani Industrial Syndicate Ltd (526117.BO) is 10.15%.

	Range	Selected
Cost of equity	11.30% - 14.50%	12.90%
Tax rate	7.60% - 13.50%	10.55%
Cost of debt	7.00% - 13.30%	10.15%
WACC	10.2% - 13.8%	12.0%

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	0.54	0.71

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.30%	14.50%

Tax rate	7.60%	13.50%
Debt/Equity ratio	0.31	0.31
Cost of debt	7.00%	13.30%

After-tax WACC	10.2%	13.8%


Selected WACC	12.0%

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 (12.90%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.54) + 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.