540006.BO WACC - Weighted Average Cost of Capital

The WACC of East West Holdings Ltd (540006.BO) is 15.9%.

The Cost of Equity of East West Holdings Ltd (540006.BO) is 18.40%.

The Cost of Debt of East West Holdings Ltd (540006.BO) is 19.45%.

	Range	Selected
Cost of equity	15.30% - 21.50%	18.40%
Tax rate	33.70% - 35.20%	34.45%
Cost of debt	12.00% - 26.90%	19.45%
WACC	12.1% - 19.7%	15.9%

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	1.01	1.47

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.30%	21.50%

Tax rate	33.70%	35.20%
Debt/Equity ratio	0.77	0.77
Cost of debt	12.00%	26.90%

After-tax WACC	12.1%	19.7%


Selected WACC	15.9%

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 (18.40%) = 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.