530139.BO WACC - Weighted Average Cost of Capital

The WACC of Kreon Finnancial Services Ltd (530139.BO) is 10.3%.

The Cost of Equity of Kreon Finnancial Services Ltd (530139.BO) is 13.35%.

The Cost of Debt of Kreon Finnancial Services Ltd (530139.BO) is 5.90%.

	Range	Selected
Cost of equity	9.30% - 17.40%	13.35%
Tax rate	6.70% - 12.60%	9.65%
Cost of debt	4.80% - 7.00%	5.90%
WACC	7.5% - 13.1%	10.3%

WACC

530139.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.3	1.03

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.30%	17.40%

Tax rate	6.70%	12.60%
Debt/Equity ratio	0.61	0.61
Cost of debt	4.80%	7.00%

After-tax WACC	7.5%	13.1%


Selected WACC	10.3%

530139.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 530139.BO:

cost_of_equity (13.35%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.3) + 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.