526783.BO WACC - Weighted Average Cost of Capital

The WACC of Dr Agarwal's Eye Hospital Ltd (526783.BO) is 12.8%.

The Cost of Equity of Dr Agarwal's Eye Hospital Ltd (526783.BO) is 13.90%.

The Cost of Debt of Dr Agarwal's Eye Hospital Ltd (526783.BO) is 5.75%.

	Range	Selected
Cost of equity	12.90% - 14.90%	13.90%
Tax rate	25.50% - 27.90%	26.70%
Cost of debt	4.00% - 7.50%	5.75%
WACC	11.7% - 13.8%	12.8%

WACC

526783.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.73	0.75

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.90%	14.90%

Tax rate	25.50%	27.90%
Debt/Equity ratio	0.13	0.13
Cost of debt	4.00%	7.50%

After-tax WACC	11.7%	13.8%


Selected WACC	12.8%

526783.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 526783.BO:

cost_of_equity (13.90%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.73) + 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.