539730.BO WACC - Weighted Average Cost of Capital

The WACC of Fredun Pharmaceuticals Ltd (539730.BO) is 15.2%.

The Cost of Equity of Fredun Pharmaceuticals Ltd (539730.BO) is 17.25%.

The Cost of Debt of Fredun Pharmaceuticals Ltd (539730.BO) is 12.15%.

	Range	Selected
Cost of equity	15.40% - 19.10%	17.25%
Tax rate	26.80% - 31.20%	29.00%
Cost of debt	10.00% - 14.30%	12.15%
WACC	13.5% - 17.0%	15.2%

WACC

539730.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.03	1.21

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.40%	19.10%

Tax rate	26.80%	31.20%
Debt/Equity ratio	0.31	0.31
Cost of debt	10.00%	14.30%

After-tax WACC	13.5%	17.0%


Selected WACC	15.2%

539730.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 539730.BO:

cost_of_equity (17.25%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.03) + 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.