The WACC of Bilcare Ltd (526853.BO) is 15.9%.
| Range | Selected | |
| Cost of equity | 22.60% - 31.40% | 27.00% |
| Tax rate | 20.10% - 34.90% | 27.50% |
| Cost of debt | 10.60% - 26.90% | 18.75% |
| WACC | 11.4% - 20.4% | 15.9% |
| Category | Low | High |
| Long-term bond rate | 6.9% | 7.4% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 1.89 | 2.53 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 22.60% | 31.40% |
| Tax rate | 20.10% | 34.90% |
| Debt/Equity ratio | 3.81 | 3.81 |
| Cost of debt | 10.60% | 26.90% |
| After-tax WACC | 11.4% | 20.4% |
| Selected WACC | 15.9% | |
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 (27.00%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.89) + 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.