532406.BO WACC - Weighted Average Cost of Capital

The WACC of Avantel Ltd (532406.BO) is 13.1%.

The Cost of Equity of Avantel Ltd (532406.BO) is 13.15%.

The Cost of Debt of Avantel Ltd (532406.BO) is 18.10%.

	Range	Selected
Cost of equity	11.80% - 14.50%	13.15%
Tax rate	18.90% - 22.60%	20.75%
Cost of debt	7.50% - 28.70%	18.10%
WACC	11.7% - 14.5%	13.1%

WACC

532406.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.59	0.71

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.80%	14.50%

Tax rate	18.90%	22.60%
Debt/Equity ratio	0	0
Cost of debt	7.50%	28.70%

After-tax WACC	11.7%	14.5%


Selected WACC	13.1%

532406.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 532406.BO:

cost_of_equity (13.15%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.59) + 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.