526851.BO WACC - Weighted Average Cost of Capital
The WACC of Arex Industries Ltd (526851.BO) is 11.8%.
| Range | Selected | |
| Cost of equity | 11.1% - 14.6% | 12.85% |
| Tax rate | 28.1% - 30.8% | 29.45% |
| Cost of debt | 7.8% - 8.1% | 7.95% |
| WACC | 10.3% - 13.2% | 11.8% |
| Category | Low | High |
| Long-term bond rate | 6.9% | 7.4% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 0.51 | 0.73 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 11.1% | 14.6% |
| Tax rate | 28.1% | 30.8% |
| Debt/Equity ratio | 0.18 | 0.18 |
| Cost of debt | 7.8% | 8.1% |
| After-tax WACC | 10.3% | 13.2% |
| Selected WACC | 11.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 526851.BO | Arex Industries Ltd | 0.18 | 0.45 | 0.4 |
| 514010.BO | Himachal Fibres Ltd | 0.04 | 0.72 | 0.7 |
| 514266.BO | Zenith Fibres Ltd | 0.01 | 0.79 | 0.79 |
| 521242.BO | Kandagiri Spinning Millis Ltd | 1.16 | -0.52 | -0.29 |
| 526479.BO | Sky Industries Ltd | 0.19 | 0.46 | 0.41 |
| 531744.BO | Gini Silk Mills Ltd | 0.17 | -0.13 | -0.12 |
| 542019.BO | Shubham Polyspin Ltd | 0.36 | 0.89 | 0.71 |
| EUROTEXIND.NS | Eurotex Industries and Exports Ltd | 3.24 | -1.29 | -0.4 |
| SOMATEX.NS | Soma Textiles & Industries Ltd | 0.01 | 1.02 | 1.01 |
| Low | High | |
| Unlevered beta | 0.4 | 0.64 |
| Relevered beta | 0.27 | 0.6 |
| Adjusted relevered beta | 0.51 | 0.73 |
526851.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 526851.BO:
cost_of_equity (12.85%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.51) + 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.