539227.BO WACC - Weighted Average Cost of Capital

The WACC of LOYAL EQUIPMENTS Ltd (539227.BO) is 12.2%.

The Cost of Equity of LOYAL EQUIPMENTS Ltd (539227.BO) is 12.55%.

The Cost of Debt of LOYAL EQUIPMENTS Ltd (539227.BO) is 5.90%.

	Range	Selected
Cost of equity	10.70% - 14.40%	12.55%
Tax rate	16.50% - 24.90%	20.70%
Cost of debt	4.30% - 7.50%	5.90%
WACC	10.4% - 14.0%	12.2%

WACC

539227.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.47	0.71

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.70%	14.40%

Tax rate	16.50%	24.90%
Debt/Equity ratio	0.06	0.06
Cost of debt	4.30%	7.50%

After-tax WACC	10.4%	14.0%


Selected WACC	12.2%

539227.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 539227.BO:

cost_of_equity (12.55%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.47) + 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.