533056.BO WACC - Weighted Average Cost of Capital

The WACC of Vedavaag Systems Ltd (533056.BO) is 14.6%.

The Cost of Equity of Vedavaag Systems Ltd (533056.BO) is 14.75%.

The Cost of Debt of Vedavaag Systems Ltd (533056.BO) is 13.85%.

	Range	Selected
Cost of equity	12.90% - 16.60%	14.75%
Tax rate	25.40% - 25.60%	25.50%
Cost of debt	7.50% - 20.20%	13.85%
WACC	12.7% - 16.6%	14.6%

WACC

533056.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.72	0.94

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.90%	16.60%

Tax rate	25.40%	25.60%
Debt/Equity ratio	0.03	0.03
Cost of debt	7.50%	20.20%

After-tax WACC	12.7%	16.6%


Selected WACC	14.6%

533056.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 533056.BO:

cost_of_equity (14.75%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.72) + 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.