539398.BO WACC - Weighted Average Cost of Capital

The WACC of Vishal Bearings Ltd (539398.BO) is 13.1%.

The Cost of Equity of Vishal Bearings Ltd (539398.BO) is 13.75%.

The Cost of Debt of Vishal Bearings Ltd (539398.BO) is 17.60%.

	Range	Selected
Cost of equity	11.80% - 15.70%	13.75%
Tax rate	29.50% - 32.70%	31.10%
Cost of debt	8.30% - 26.90%	17.60%
WACC	9.6% - 16.6%	13.1%

WACC

539398.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.59	0.84

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.80%	15.70%

Tax rate	29.50%	32.70%
Debt/Equity ratio	0.58	0.58
Cost of debt	8.30%	26.90%

After-tax WACC	9.6%	16.6%


Selected WACC	13.1%

539398.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 539398.BO:

cost_of_equity (13.75%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.59) + 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.