537669.BO WACC - Weighted Average Cost of Capital

The WACC of Laxmipati Engineering Works Ltd (537669.BO) is 14.6%.

The Cost of Equity of Laxmipati Engineering Works Ltd (537669.BO) is 15.35%.

The Cost of Debt of Laxmipati Engineering Works Ltd (537669.BO) is 14.85%.

	Range	Selected
Cost of equity	12.20% - 18.50%	15.35%
Tax rate	13.80% - 19.60%	16.70%
Cost of debt	11.10% - 18.60%	14.85%
WACC	11.6% - 17.7%	14.6%

WACC

537669.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.64	1.15

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.20%	18.50%

Tax rate	13.80%	19.60%
Debt/Equity ratio	0.31	0.31
Cost of debt	11.10%	18.60%

After-tax WACC	11.6%	17.7%


Selected WACC	14.6%

537669.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 537669.BO:

cost_of_equity (15.35%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.64) + 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.