539255.BO WACC - Weighted Average Cost of Capital

The WACC of Star Delta Transformers Ltd (539255.BO) is 12.8%.

The Cost of Equity of Star Delta Transformers Ltd (539255.BO) is 12.70%.

The Cost of Debt of Star Delta Transformers Ltd (539255.BO) is 27.40%.

	Range	Selected
Cost of equity	11.00% - 14.40%	12.70%
Tax rate	25.90% - 26.40%	26.15%
Cost of debt	7.50% - 47.30%	27.40%
WACC	11.0% - 14.6%	12.8%

WACC

539255.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.5	0.71

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.00%	14.40%

Tax rate	25.90%	26.40%
Debt/Equity ratio	0.01	0.01
Cost of debt	7.50%	47.30%

After-tax WACC	11.0%	14.6%


Selected WACC	12.8%

539255.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 539255.BO:

cost_of_equity (12.70%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.5) + 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.