The WACC of Virinchi Ltd (532372.BO) is 13.8%.
| Range | Selected | |
| Cost of equity | 15.10% - 17.70% | 16.40% |
| Tax rate | 20.90% - 36.40% | 28.65% |
| Cost of debt | 14.60% - 17.40% | 16.00% |
| WACC | 13.3% - 14.3% | 13.8% |
| Category | Low | High |
| Long-term bond rate | 7.4% | 7.9% |
| Equity market risk premium | 6.9% | 7.9% |
| Adjusted beta | 1.11 | 1.17 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 15.10% | 17.70% |
| Tax rate | 20.90% | 36.40% |
| Debt/Equity ratio | 1.05 | 1.05 |
| Cost of debt | 14.60% | 17.40% |
| After-tax WACC | 13.3% | 14.3% |
| Selected WACC | 13.8% | |
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 532372.BO:
cost_of_equity (16.40%) = risk_free_rate (7.65%) + equity_risk_premium (7.40%) * adjusted_beta (1.11) + 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.