531842.BO WACC - Weighted Average Cost of Capital

The WACC of Lahoti Overseas Ltd (531842.BO) is 11.2%.

The Cost of Equity of Lahoti Overseas Ltd (531842.BO) is 11.70%.

The Cost of Debt of Lahoti Overseas Ltd (531842.BO) is 7.70%.

	Range	Selected
Cost of equity	10.50% - 12.90%	11.70%
Tax rate	28.20% - 30.30%	29.25%
Cost of debt	7.60% - 7.80%	7.70%
WACC	10.1% - 12.3%	11.2%

WACC

531842.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.44	0.54

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.50%	12.90%

Tax rate	28.20%	30.30%
Debt/Equity ratio	0.09	0.09
Cost of debt	7.60%	7.80%

After-tax WACC	10.1%	12.3%


Selected WACC	11.2%

531842.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 531842.BO:

cost_of_equity (11.70%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.44) + 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.