The WACC of JTL Infra Ltd (534600.BO) is 14.3%.
| Range | Selected | |
| Cost of equity | 13.40% - 15.90% | 14.65% |
| Tax rate | 28.20% - 32.40% | 30.30% |
| Cost of debt | 9.20% - 10.80% | 10.00% |
| WACC | 13.1% - 15.4% | 14.3% |
| Category | Low | High |
| Long-term bond rate | 7.5% | 8.0% |
| Equity market risk premium | 6.9% | 7.9% |
| Adjusted beta | 0.85 | 0.93 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 13.40% | 15.90% |
| Tax rate | 28.20% | 32.40% |
| Debt/Equity ratio | 0.05 | 0.05 |
| Cost of debt | 9.20% | 10.80% |
| After-tax WACC | 13.1% | 15.4% |
| Selected WACC | 14.3% | |
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 534600.BO:
cost_of_equity (14.65%) = risk_free_rate (7.75%) + equity_risk_premium (7.40%) * adjusted_beta (0.85) + 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.