530741.BO WACC - Weighted Average Cost of Capital

The WACC of Ovobel Foods Ltd (530741.BO) is 11.8%.

The Cost of Equity of Ovobel Foods Ltd (530741.BO) is 13.55%.

The Cost of Debt of Ovobel Foods Ltd (530741.BO) is 6.50%.

	Range	Selected
Cost of equity	12.00% - 15.10%	13.55%
Tax rate	26.60% - 28.00%	27.30%
Cost of debt	5.20% - 7.80%	6.50%
WACC	10.3% - 13.2%	11.8%

WACC

530741.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.61	0.77

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.00%	15.10%

Tax rate	26.60%	28.00%
Debt/Equity ratio	0.25	0.25
Cost of debt	5.20%	7.80%

After-tax WACC	10.3%	13.2%


Selected WACC	11.8%

530741.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 530741.BO:

cost_of_equity (13.55%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.61) + 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.