538952.BO WACC - Weighted Average Cost of Capital
The WACC of Abhinav Leasing & Finance Ltd (538952.BO) is 5.8%.
| Range | Selected | |
| Cost of equity | 12.9% - 15.6% | 14.25% |
| Tax rate | 25.3% - 27.4% | 26.35% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.5% - 6.0% | 5.8% |
| Category | Low | High |
| Long-term bond rate | 6.9% | 7.4% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 0.73 | 0.83 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 12.9% | 15.6% |
| Tax rate | 25.3% | 27.4% |
| Debt/Equity ratio | 4.09 | 4.09 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.5% | 6.0% |
| Selected WACC | 5.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 538952.BO | Abhinav Leasing & Finance Ltd | 4.09 | -0.18 | -0.04 |
| 511716.BO | Escorts Finance Ltd | 0.35 | 0.23 | 0.18 |
| 512020.BO | Saraswati Commercial (India) Ltd | 0 | -0.6 | -0.6 |
| 538611.BO | Real Touch Finance Ltd | 1.96 | 0.8 | 0.33 |
| 538943.BO | Sonal Mercantile Ltd | 1.87 | 0.37 | 0.16 |
| 539174.BO | Helpage Finlease Ltd | 2.3 | 0.36 | 0.14 |
| 539217.BO | Srestha Finvest Ltd | 0.63 | -0.16 | -0.11 |
| 539391.BO | Acme Resources Ltd | 0.11 | 0.73 | 0.67 |
| 540135.BO | ARC Finance Ltd | 0.16 | 0.33 | 0.3 |
| GLFL.NS | Gujarat Lease Financing Ltd | 0.56 | 0.27 | 0.19 |
| Low | High | |
| Unlevered beta | 0.15 | 0.19 |
| Relevered beta | 0.6 | 0.75 |
| Adjusted relevered beta | 0.73 | 0.83 |
538952.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 538952.BO:
cost_of_equity (14.25%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.73) + 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.