538119.BO WACC - Weighted Average Cost of Capital

The WACC of R & B Denims Ltd (538119.BO) is 12.6%.

The Cost of Equity of R & B Denims Ltd (538119.BO) is 13.25%.

The Cost of Debt of R & B Denims Ltd (538119.BO) is 7.65%.

	Range	Selected
Cost of equity	12.10% - 14.40%	13.25%
Tax rate	27.20% - 27.70%	27.45%
Cost of debt	7.50% - 7.80%	7.65%
WACC	11.6% - 13.7%	12.6%

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	0.63	0.7

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.10%	14.40%

Tax rate	27.20%	27.70%
Debt/Equity ratio	0.08	0.08
Cost of debt	7.50%	7.80%

After-tax WACC	11.6%	13.7%


Selected WACC	12.6%

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 (13.25%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.63) + 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.