526179.BO WACC - Weighted Average Cost of Capital

The WACC of Ludlow Jute & Specialities Ltd (526179.BO) is 9.4%.

The Cost of Equity of Ludlow Jute & Specialities Ltd (526179.BO) is 12.80%.

The Cost of Debt of Ludlow Jute & Specialities Ltd (526179.BO) is 7.25%.

	Range	Selected
Cost of equity	10.90% - 14.70%	12.80%
Tax rate	27.90% - 32.40%	30.15%
Cost of debt	6.40% - 8.10%	7.25%
WACC	8.1% - 10.6%	9.4%

WACC

526179.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.49	0.73

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.90%	14.70%

Tax rate	27.90%	32.40%
Debt/Equity ratio	0.79	0.79
Cost of debt	6.40%	8.10%

After-tax WACC	8.1%	10.6%


Selected WACC	9.4%

526179.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 526179.BO:

cost_of_equity (12.80%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.49) + 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.