The WACC of Bilcare Ltd (526853.BO) is 12.1%.
| Range | Selected | |
| Cost of equity | 32.30% - 39.40% | 35.85% |
| Tax rate | 16.20% - 33.10% | 24.65% |
| Cost of debt | 7.00% - 10.60% | 8.80% |
| WACC | 10.9% - 13.3% | 12.1% |
| Category | Low | High |
| Long-term bond rate | 6.9% | 7.4% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 3.06 | 3.39 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 32.30% | 39.40% |
| Tax rate | 16.20% | 33.10% |
| Debt/Equity ratio | 4.21 | 4.21 |
| Cost of debt | 7.00% | 10.60% |
| After-tax WACC | 10.9% | 13.3% |
| Selected WACC | 12.1% | |
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 526853.BO:
cost_of_equity (35.85%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (3.06) + 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.