531137.BO WACC - Weighted Average Cost of Capital

The WACC of Gemstone Investments Ltd (531137.BO) is 12.7%.

The Cost of Equity of Gemstone Investments Ltd (531137.BO) is 15.55%.

The Cost of Debt of Gemstone Investments Ltd (531137.BO) is 7.50%.

	Range	Selected
Cost of equity	13.60% - 17.50%	15.55%
Tax rate	26.90% - 29.00%	27.95%
Cost of debt	7.50% - 7.50%	7.50%
WACC	11.3% - 14.1%	12.7%

WACC

531137.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.81	1.03

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.60%	17.50%

Tax rate	26.90%	29.00%
Debt/Equity ratio	0.39	0.39
Cost of debt	7.50%	7.50%

After-tax WACC	11.3%	14.1%


Selected WACC	12.7%

531137.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 531137.BO:

cost_of_equity (15.55%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.81) + 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.