531411.BO WACC - Weighted Average Cost of Capital

The WACC of Tuni Textile Mills Ltd (531411.BO) is 10.0%.

The Cost of Equity of Tuni Textile Mills Ltd (531411.BO) is 11.60%.

The Cost of Debt of Tuni Textile Mills Ltd (531411.BO) is 12.05%.

	Range	Selected
Cost of equity	10.10% - 13.10%	11.60%
Tax rate	28.60% - 41.10%	34.85%
Cost of debt	12.00% - 12.10%	12.05%
WACC	9.5% - 10.6%	10.0%

WACC

531411.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.39	0.56

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.10%	13.10%

Tax rate	28.60%	41.10%
Debt/Equity ratio	0.7	0.7
Cost of debt	12.00%	12.10%

After-tax WACC	9.5%	10.6%


Selected WACC	10.0%

531411.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 531411.BO:

cost_of_equity (11.60%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.39) + 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.