531888.BO WACC - Weighted Average Cost of Capital

The WACC of Rexnord Electronics and Controls Ltd (531888.BO) is 13.7%.

The Cost of Equity of Rexnord Electronics and Controls Ltd (531888.BO) is 14.80%.

The Cost of Debt of Rexnord Electronics and Controls Ltd (531888.BO) is 6.50%.

	Range	Selected
Cost of equity	13.40% - 16.20%	14.80%
Tax rate	26.00% - 26.10%	26.05%
Cost of debt	5.10% - 7.90%	6.50%
WACC	12.3% - 15.1%	13.7%

WACC

531888.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.78	0.9

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.40%	16.20%

Tax rate	26.00%	26.10%
Debt/Equity ratio	0.12	0.12
Cost of debt	5.10%	7.90%

After-tax WACC	12.3%	15.1%


Selected WACC	13.7%

531888.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 531888.BO:

cost_of_equity (14.80%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.78) + 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.