539839.BO
Franklin Leasing and Finance Ltd
Price:  
13.29 
INR
Volume:  
4,000
India | Consumer Finance

539839.BO WACC - Weighted Average Cost of Capital

The WACC of Franklin Leasing and Finance Ltd (539839.BO) is 8.0%.

The Cost of Equity of Franklin Leasing and Finance Ltd (539839.BO) is 12.35%.
The Cost of Debt of Franklin Leasing and Finance Ltd (539839.BO) is 5%.

RangeSelected
Cost of equity11.1% - 13.6%12.35%
Tax rate26.0% - 26.0%26%
Cost of debt5.0% - 5.0%5%
WACC7.4% - 8.6%8.0%
WACC

539839.BO WACC calculation

CategoryLowHigh
Long-term bond rate6.9%7.4%
Equity market risk premium8.3%9.3%
Adjusted beta0.510.61
Additional risk adjustments0.0%0.5%
Cost of equity11.1%13.6%
Tax rate26.0%26.0%
Debt/Equity ratio
11
Cost of debt5.0%5.0%
After-tax WACC7.4%8.6%
Selected WACC8.0%

539839.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 539839.BO:

cost_of_equity (12.35%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.51) + 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.