526817.BO WACC - Weighted Average Cost of Capital

The WACC of Cheviot Co Ltd (526817.BO) is 13.5%.

The Cost of Equity of Cheviot Co Ltd (526817.BO) is 13.50%.

The Cost of Debt of Cheviot Co Ltd (526817.BO) is 11.10%.

	Range	Selected
Cost of equity	12.30% - 14.70%	13.50%
Tax rate	23.20% - 25.10%	24.15%
Cost of debt	8.20% - 14.00%	11.10%
WACC	12.3% - 14.6%	13.5%

WACC

526817.BO WACC calculation

Category	Low	High

Long-term bond rate	7.5%	8.0%
Equity market risk premium	6.9%	7.9%
Adjusted beta	0.7	0.78

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.30%	14.70%

Tax rate	23.20%	25.10%
Debt/Equity ratio	0.01	0.01
Cost of debt	8.20%	14.00%

After-tax WACC	12.3%	14.6%


Selected WACC	13.5%

526817.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 526817.BO:

cost_of_equity (13.50%) = risk_free_rate (7.75%) + equity_risk_premium (7.40%) * adjusted_beta (0.7) + 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.