533427.BO WACC - Weighted Average Cost of Capital

The WACC of VMS Industries Ltd (533427.BO) is 10.3%.

The Cost of Equity of VMS Industries Ltd (533427.BO) is 11.30%.

The Cost of Debt of VMS Industries Ltd (533427.BO) is 8.50%.

	Range	Selected
Cost of equity	10.10% - 12.50%	11.30%
Tax rate	21.70% - 25.90%	23.80%
Cost of debt	6.50% - 10.50%	8.50%
WACC	9.1% - 11.6%	10.3%

WACC

533427.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.39	0.5

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.10%	12.50%

Tax rate	21.70%	25.90%
Debt/Equity ratio	0.25	0.25
Cost of debt	6.50%	10.50%

After-tax WACC	9.1%	11.6%


Selected WACC	10.3%

533427.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 533427.BO:

cost_of_equity (11.30%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.39) + 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.