The WACC of GRM Overseas Ltd (531449.BO) is 13.4%.
| Range | Selected | |
| Cost of equity | 13.10% - 16.00% | 14.55% |
| Tax rate | 26.90% - 30.70% | 28.80% |
| Cost of debt | 5.50% - 8.60% | 7.05% |
| WACC | 12.0% - 14.8% | 13.4% |
| Category | Low | High |
| Long-term bond rate | 7.3% | 7.8% |
| Equity market risk premium | 6.9% | 7.9% |
| Adjusted beta | 0.84 | 0.98 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 13.10% | 16.00% |
| Tax rate | 26.90% | 30.70% |
| Debt/Equity ratio | 0.13 | 0.13 |
| Cost of debt | 5.50% | 8.60% |
| After-tax WACC | 12.0% | 14.8% |
| Selected WACC | 13.4% | |
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 531449.BO:
cost_of_equity (14.55%) = risk_free_rate (7.55%) + equity_risk_premium (7.40%) * adjusted_beta (0.84) + 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.