538119.BO WACC - Weighted Average Cost of Capital

The WACC of R & B Denims Ltd (538119.BO) is 12.5%.

The Cost of Equity of R & B Denims Ltd (538119.BO) is 13.15%.

The Cost of Debt of R & B Denims Ltd (538119.BO) is 9.75%.

	Range	Selected
Cost of equity	11.40% - 14.90%	13.15%
Tax rate	26.60% - 27.10%	26.85%
Cost of debt	9.10% - 10.40%	9.75%
WACC	10.9% - 14.2%	12.5%

WACC

538119.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.54	0.76

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.40%	14.90%

Tax rate	26.60%	27.10%
Debt/Equity ratio	0.12	0.12
Cost of debt	9.10%	10.40%

After-tax WACC	10.9%	14.2%


Selected WACC	12.5%

538119.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 538119.BO:

cost_of_equity (13.15%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.54) + 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.