539730.BO
Fredun Pharmaceuticals Ltd
Price:  
844.25 
INR
Volume:  
22,475.00
India | Pharmaceuticals
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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.