The WACC of RCI Industries & Technologies Ltd (537254.BO) is 9.1%.
| Range | Selected | |
| Cost of equity | 17.60% - 123.50% | 70.55% |
| Tax rate | 0.80% - 8.10% | 4.45% |
| Cost of debt | 7.00% - 7.70% | 7.35% |
| WACC | 7.3% - 10.8% | 9.1% |
| Category | Low | High |
| Long-term bond rate | 6.9% | 7.4% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 1.29 | 12.42 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 17.60% | 123.50% |
| Tax rate | 0.80% | 8.10% |
| Debt/Equity ratio | 30.03 | 30.03 |
| Cost of debt | 7.00% | 7.70% |
| After-tax WACC | 7.3% | 10.8% |
| Selected WACC | 9.1% | |
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 537254.BO:
cost_of_equity (70.55%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.29) + 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.