540269.BO WACC - Weighted Average Cost of Capital

The WACC of Super Fine Knitters Ltd (540269.BO) is 10.0%.

The Cost of Equity of Super Fine Knitters Ltd (540269.BO) is 12.15%.

The Cost of Debt of Super Fine Knitters Ltd (540269.BO) is 9.00%.

	Range	Selected
Cost of equity	10.80% - 13.50%	12.15%
Tax rate	15.40% - 24.00%	19.70%
Cost of debt	7.50% - 10.50%	9.00%
WACC	8.9% - 11.1%	10.0%

WACC

540269.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.47	0.61

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.80%	13.50%

Tax rate	15.40%	24.00%
Debt/Equity ratio	0.75	0.75
Cost of debt	7.50%	10.50%

After-tax WACC	8.9%	11.1%


Selected WACC	10.0%

540269.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 540269.BO:

cost_of_equity (12.15%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.47) + 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.