531398.BO WACC - Weighted Average Cost of Capital

The WACC of Source Natural Foods and Herbal Supplements Ltd (531398.BO) is 13.5%.

The Cost of Equity of Source Natural Foods and Herbal Supplements Ltd (531398.BO) is 13.50%.

The Cost of Debt of Source Natural Foods and Herbal Supplements Ltd (531398.BO) is 180.75%.

	Range	Selected
Cost of equity	12.10% - 14.90%	13.50%
Tax rate	20.00% - 27.00%	23.50%
Cost of debt	7.60% - 353.90%	180.75%
WACC	12.1% - 14.9%	13.5%

WACC

531398.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.63	0.75

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.10%	14.90%

Tax rate	20.00%	27.00%
Debt/Equity ratio	0	0
Cost of debt	7.60%	353.90%

After-tax WACC	12.1%	14.9%


Selected WACC	13.5%

531398.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 531398.BO:

cost_of_equity (13.50%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.63) + 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.