540144.BO WACC - Weighted Average Cost of Capital

The WACC of DRA Consultants Ltd (540144.BO) is 13.7%.

The Cost of Equity of DRA Consultants Ltd (540144.BO) is 21.90%.

The Cost of Debt of DRA Consultants Ltd (540144.BO) is 7.50%.

	Range	Selected
Cost of equity	16.80% - 27.00%	21.90%
Tax rate	26.40% - 27.10%	26.75%
Cost of debt	7.50% - 7.50%	7.50%
WACC	11.2% - 16.2%	13.7%

WACC

540144.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.2	2.06

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.80%	27.00%

Tax rate	26.40%	27.10%
Debt/Equity ratio	1	1
Cost of debt	7.50%	7.50%

After-tax WACC	11.2%	16.2%


Selected WACC	13.7%

540144.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 540144.BO:

cost_of_equity (21.90%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.2) + 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.