530125.BO WACC - Weighted Average Cost of Capital

The WACC of Samrat Pharmachem Ltd (530125.BO) is 14.6%.

The Cost of Equity of Samrat Pharmachem Ltd (530125.BO) is 15.25%.

The Cost of Debt of Samrat Pharmachem Ltd (530125.BO) is 8.90%.

	Range	Selected
Cost of equity	13.70% - 16.80%	15.25%
Tax rate	26.50% - 26.90%	26.70%
Cost of debt	7.50% - 10.30%	8.90%
WACC	13.1% - 16.1%	14.6%

WACC

530125.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.82	0.96

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.70%	16.80%

Tax rate	26.50%	26.90%
Debt/Equity ratio	0.07	0.07
Cost of debt	7.50%	10.30%

After-tax WACC	13.1%	16.1%


Selected WACC	14.6%

530125.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 530125.BO:

cost_of_equity (15.25%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.82) + 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.