539398.BO WACC - Weighted Average Cost of Capital

The WACC of Vishal Bearings Ltd (539398.BO) is 13.3%.

The Cost of Equity of Vishal Bearings Ltd (539398.BO) is 13.70%.

The Cost of Debt of Vishal Bearings Ltd (539398.BO) is 17.95%.

	Range	Selected
Cost of equity	11.90% - 15.50%	13.70%
Tax rate	27.40% - 29.00%	28.20%
Cost of debt	9.00% - 26.90%	17.95%
WACC	9.8% - 16.9%	13.3%

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	0.6	0.82

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.90%	15.50%

Tax rate	27.40%	29.00%
Debt/Equity ratio	0.62	0.62
Cost of debt	9.00%	26.90%

After-tax WACC	9.8%	16.9%


Selected WACC	13.3%

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 (13.70%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.6) + 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.