539997.BO WACC - Weighted Average Cost of Capital

The WACC of Kwality Pharmaceuticals Ltd (539997.BO) is 13.5%.

The Cost of Equity of Kwality Pharmaceuticals Ltd (539997.BO) is 14.25%.

The Cost of Debt of Kwality Pharmaceuticals Ltd (539997.BO) is 8.90%.

	Range	Selected
Cost of equity	12.90% - 15.60%	14.25%
Tax rate	25.30% - 26.10%	25.70%
Cost of debt	7.90% - 9.90%	8.90%
WACC	12.2% - 14.8%	13.5%

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	0.73	0.83

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.90%	15.60%

Tax rate	25.30%	26.10%
Debt/Equity ratio	0.1	0.1
Cost of debt	7.90%	9.90%

After-tax WACC	12.2%	14.8%


Selected WACC	13.5%

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 (14.25%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.73) + 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.