539997.BO WACC - Weighted Average Cost of Capital

The WACC of Kwality Pharmaceuticals Ltd (539997.BO) is 14.3%.

The Cost of Equity of Kwality Pharmaceuticals Ltd (539997.BO) is 15.35%.

The Cost of Debt of Kwality Pharmaceuticals Ltd (539997.BO) is 8.70%.

	Range	Selected
Cost of equity	14.20% - 16.50%	15.35%
Tax rate	24.70% - 25.20%	24.95%
Cost of debt	8.10% - 9.30%	8.70%
WACC	13.3% - 15.4%	14.3%

WACC

539997.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.88	0.93

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.20%	16.50%

Tax rate	24.70%	25.20%
Debt/Equity ratio	0.13	0.13
Cost of debt	8.10%	9.30%

After-tax WACC	13.3%	15.4%


Selected WACC	14.3%

539997.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 539997.BO:

cost_of_equity (15.35%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.88) + 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.