526981.BO WACC - Weighted Average Cost of Capital

The WACC of Shri Bajrang Alloys Ltd (526981.BO) is 12.7%.

The Cost of Equity of Shri Bajrang Alloys Ltd (526981.BO) is 15.90%.

The Cost of Debt of Shri Bajrang Alloys Ltd (526981.BO) is 6.40%.

	Range	Selected
Cost of equity	14.30% - 17.50%	15.90%
Tax rate	29.20% - 33.90%	31.55%
Cost of debt	5.30% - 7.50%	6.40%
WACC	11.4% - 14.0%	12.7%

WACC

526981.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.9	1.04

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.30%	17.50%

Tax rate	29.20%	33.90%
Debt/Equity ratio	0.39	0.39
Cost of debt	5.30%	7.50%

After-tax WACC	11.4%	14.0%


Selected WACC	12.7%

526981.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 526981.BO:

cost_of_equity (15.90%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.9) + 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.