540192.BO WACC - Weighted Average Cost of Capital

The WACC of LKP Securities Ltd (540192.BO) is 16.0%.

The Cost of Equity of LKP Securities Ltd (540192.BO) is 17.85%.

The Cost of Debt of LKP Securities Ltd (540192.BO) is 13.75%.

	Range	Selected
Cost of equity	16.50% - 19.20%	17.85%
Tax rate	28.20% - 28.90%	28.55%
Cost of debt	8.30% - 19.20%	13.75%
WACC	14.0% - 17.9%	16.0%

WACC

540192.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.16	1.22

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.50%	19.20%

Tax rate	28.20%	28.90%
Debt/Equity ratio	0.31	0.31
Cost of debt	8.30%	19.20%

After-tax WACC	14.0%	17.9%


Selected WACC	16.0%

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 (17.85%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.16) + 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.