526479.BO WACC - Weighted Average Cost of Capital

The WACC of Sky Industries Ltd (526479.BO) is 12.0%.

The Cost of Equity of Sky Industries Ltd (526479.BO) is 12.85%.

The Cost of Debt of Sky Industries Ltd (526479.BO) is 8.30%.

	Range	Selected
Cost of equity	11.40% - 14.30%	12.85%
Tax rate	25.40% - 25.60%	25.50%
Cost of debt	7.80% - 8.80%	8.30%
WACC	10.7% - 13.3%	12.0%

WACC

526479.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	0.69

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.40%	14.30%

Tax rate	25.40%	25.60%
Debt/Equity ratio	0.15	0.15
Cost of debt	7.80%	8.80%

After-tax WACC	10.7%	13.3%


Selected WACC	12.0%

526479.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 526479.BO:

cost_of_equity (12.85%) = 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.