539730.BO WACC - Weighted Average Cost of Capital

The WACC of Fredun Pharmaceuticals Ltd (539730.BO) is 15.5%.

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

The Cost of Debt of Fredun Pharmaceuticals Ltd (539730.BO) is 13.55%.

	Range	Selected
Cost of equity	15.30% - 19.20%	17.25%
Tax rate	27.80% - 31.80%	29.80%
Cost of debt	10.50% - 16.60%	13.55%
WACC	13.6% - 17.5%	15.5%

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	1.01	1.21

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.30%	19.20%

Tax rate	27.80%	31.80%
Debt/Equity ratio	0.28	0.28
Cost of debt	10.50%	16.60%

After-tax WACC	13.6%	17.5%


Selected WACC	15.5%

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 (1.01) + 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.