The WACC of Maris Spinners Ltd (531503.BO) is 14.7%.
| Range | Selected | |
| Cost of equity | 20.20% - 27.90% | 24.05% |
| Tax rate | 31.00% - 31.60% | 31.30% |
| Cost of debt | 9.30% - 23.90% | 16.60% |
| WACC | 10.0% - 19.4% | 14.7% |
| Category | Low | High |
| Long-term bond rate | 6.9% | 7.4% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 1.61 | 2.15 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 20.20% | 27.90% |
| Tax rate | 31.00% | 31.60% |
| Debt/Equity ratio | 2.79 | 2.79 |
| Cost of debt | 9.30% | 23.90% |
| After-tax WACC | 10.0% | 19.4% |
| Selected WACC | 14.7% | |
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 531503.BO:
cost_of_equity (24.05%) = 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.