540192.BO WACC - Weighted Average Cost of Capital
The WACC of LKP Securities Ltd (540192.BO) is 14.2%.
| Range | Selected | |
| Cost of equity | 12.8% - 17.2% | 15% |
| Tax rate | 28.0% - 28.9% | 28.45% |
| Cost of debt | 7.9% - 12.6% | 10.25% |
| WACC | 12.0% - 16.3% | 14.2% |
| Category | Low | High |
| Long-term bond rate | 6.9% | 7.4% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 0.71 | 1 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 12.8% | 17.2% |
| Tax rate | 28.0% | 28.9% |
| Debt/Equity ratio | 0.12 | 0.12 |
| Cost of debt | 7.9% | 12.6% |
| After-tax WACC | 12.0% | 16.3% |
| Selected WACC | 14.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 540192.BO | LKP Securities Ltd | 0.12 | 1.26 | 1.16 |
| 507864.BO | Pioneer Investcorp Ltd | 1.35 | 0.1 | 0.05 |
| 508905.BO | SMIFS Capital Markets Ltd | 0 | 0.58 | 0.58 |
| 511557.BO | Pro Fin Capital Services Ltd | 2.45 | -0.19 | -0.07 |
| 511589.BO | Avonmore Capital & Management Services Ltd | 0.1 | 1.22 | 1.13 |
| 530245.BO | Aryaman Financial Services Ltd | 0.07 | -0.55 | -0.52 |
| 538351.BO | A F Enterprises Ltd | 0.35 | 0.56 | 0.45 |
| 590082.BO | Lohia Securities Ltd | 0.01 | 0.87 | 0.87 |
| ALMONDZ.NS | Almondz Global Securities Ltd | 0.06 | 1.07 | 1.02 |
| PRIMESECU.NS | Prime Securities Ltd | 0 | 1.42 | 1.41 |
| Low | High | |
| Unlevered beta | 0.53 | 0.93 |
| Relevered beta | 0.57 | 1 |
| Adjusted relevered beta | 0.71 | 1 |
540192.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 540192.BO:
cost_of_equity (15.00%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.71) + 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.