539227.BO WACC - Weighted Average Cost of Capital

The WACC of LOYAL EQUIPMENTS Ltd (539227.BO) is 12.1%.

The Cost of Equity of LOYAL EQUIPMENTS Ltd (539227.BO) is 12.45%.

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

	Range	Selected
Cost of equity	10.90% - 14.00%	12.45%
Tax rate	16.50% - 24.90%	20.70%
Cost of debt	4.30% - 7.50%	5.90%
WACC	10.6% - 13.6%	12.1%

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	0.49	0.66

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.90%	14.00%

Tax rate	16.50%	24.90%
Debt/Equity ratio	0.05	0.05
Cost of debt	4.30%	7.50%

After-tax WACC	10.6%	13.6%


Selected WACC	12.1%

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 (12.45%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.49) + 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.