531893.BO WACC - Weighted Average Cost of Capital

The WACC of Sawaca Business Machines Ltd (531893.BO) is 11.1%.

The Cost of Equity of Sawaca Business Machines Ltd (531893.BO) is 11.20%.

The Cost of Debt of Sawaca Business Machines Ltd (531893.BO) is 7.50%.

	Range	Selected
Cost of equity	10.20% - 12.20%	11.20%
Tax rate	26.10% - 26.60%	26.35%
Cost of debt	7.50% - 7.50%	7.50%
WACC	10.1% - 12.1%	11.1%

WACC

531893.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.4	0.46

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.20%	12.20%

Tax rate	26.10%	26.60%
Debt/Equity ratio	0.01	0.01
Cost of debt	7.50%	7.50%

After-tax WACC	10.1%	12.1%


Selected WACC	11.1%

531893.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 531893.BO:

cost_of_equity (11.20%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.4) + 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.