The WACC of SAB Industries Ltd (539112.BO) is 11.2%.
Range | Selected | |
Cost of equity | 10.4% - 12.0% | 11.2% |
Tax rate | 1.2% - 4.5% | 2.85% |
Cost of debt | 7.8% - 15.4% | 11.6% |
WACC | 9.7% - 12.7% | 11.2% |
Category | Low | High |
Long-term bond rate | 6.9% | 7.4% |
Equity market risk premium | 8.3% | 9.3% |
Adjusted beta | 0.42 | 0.44 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 10.4% | 12.0% |
Tax rate | 1.2% | 4.5% |
Debt/Equity ratio | 0.35 | 0.35 |
Cost of debt | 7.8% | 15.4% |
After-tax WACC | 9.7% | 12.7% |
Selected WACC | 11.2% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
539112.BO | SAB Industries Ltd | 0.35 | -0.04 | -0.03 |
508961.BO | Shricon Industries Ltd | 0 | 0.92 | 0.92 |
535693.BO | Brahmaputra Infrastructure Ltd | 1.83 | 0.26 | 0.09 |
538401.BO | Maestros Electronics & Telecommunications Systems Ltd | 0.06 | 0.13 | 0.12 |
538943.BO | Sonal Mercantile Ltd | 1.93 | 0.37 | 0.13 |
542677.BO | Mahesh Developers Ltd | 2.18 | 0.03 | 0.01 |
ATALREAL.NS | Atal Realtech Ltd | 0.09 | 0.12 | 0.11 |
HECPROJECT.NS | HEC Infra Projects Ltd | 0.23 | 1.2 | 0.98 |
NDX.VN | Danang Housing Development JSC | 1.12 | 0.32 | 0.15 |
UNIVASTU.NS | Univastu India Ltd | 0.11 | 0.07 | 0.07 |
Low | High | |
Unlevered beta | 0.1 | 0.12 |
Relevered beta | 0.13 | 0.16 |
Adjusted relevered beta | 0.42 | 0.44 |
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 539112.BO:
cost_of_equity (11.20%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.42) + 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.