531346.BO
Eastern Treads Ltd
Price:  
33.65 
INR
Volume:  
255.00
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531346.BO WACC - Weighted Average Cost of Capital

The WACC of Eastern Treads Ltd (531346.BO) is 12.9%.

The Cost of Equity of Eastern Treads Ltd (531346.BO) is 23.75%.
The Cost of Debt of Eastern Treads Ltd (531346.BO) is 7.70%.

Range Selected
Cost of equity 20.20% - 27.30% 23.75%
Tax rate 5.70% - 11.50% 8.60%
Cost of debt 7.00% - 8.40% 7.70%
WACC 11.4% - 14.3% 12.9%
WACC

531346.BO WACC calculation

Category Low High
Long-term bond rate 6.9% 7.4%
Equity market risk premium 8.3% 9.3%
Adjusted beta 1.61 2.08
Additional risk adjustments 0.0% 0.5%
Cost of equity 20.20% 27.30%
Tax rate 5.70% 11.50%
Debt/Equity ratio 1.86 1.86
Cost of debt 7.00% 8.40%
After-tax WACC 11.4% 14.3%
Selected WACC 12.9%

531346.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 531346.BO:

cost_of_equity (23.75%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.61) + 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.