540006.BO WACC - Weighted Average Cost of Capital

The WACC of East West Holdings Ltd (540006.BO) is 13.5%.

The Cost of Equity of East West Holdings Ltd (540006.BO) is 16.35%.

The Cost of Debt of East West Holdings Ltd (540006.BO) is 15.15%.

	Range	Selected
Cost of equity	14.70% - 18.00%	16.35%
Tax rate	33.80% - 38.80%	36.30%
Cost of debt	11.70% - 18.60%	15.15%
WACC	11.7% - 15.2%	13.5%

WACC

540006.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.95	1.09

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.70%	18.00%

Tax rate	33.80%	38.80%
Debt/Equity ratio	0.76	0.76
Cost of debt	11.70%	18.60%

After-tax WACC	11.7%	15.2%


Selected WACC	13.5%

540006.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 540006.BO:

cost_of_equity (16.35%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.95) + 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.