531982.BO WACC - Weighted Average Cost of Capital

The WACC of Spectrum Foods Ltd (531982.BO) is 13.2%.

The Cost of Equity of Spectrum Foods Ltd (531982.BO) is 13.45%.

The Cost of Debt of Spectrum Foods Ltd (531982.BO) is 5.00%.

	Range	Selected
Cost of equity	12.50% - 14.40%	13.45%
Tax rate	25.50% - 41.60%	33.55%
Cost of debt	5.00% - 5.00%	5.00%
WACC	12.3% - 14.1%	13.2%

WACC

531982.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.68	0.7

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.50%	14.40%

Tax rate	25.50%	41.60%
Debt/Equity ratio	0.03	0.03
Cost of debt	5.00%	5.00%

After-tax WACC	12.3%	14.1%


Selected WACC	13.2%

531982.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 531982.BO:

cost_of_equity (13.45%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.68) + 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.