540405.BO WACC - Weighted Average Cost of Capital

The WACC of Oceanic Foods Ltd (540405.BO) is 13.1%.

The Cost of Equity of Oceanic Foods Ltd (540405.BO) is 15.50%.

The Cost of Debt of Oceanic Foods Ltd (540405.BO) is 11.65%.

	Range	Selected
Cost of equity	14.00% - 17.00%	15.50%
Tax rate	23.80% - 25.80%	24.80%
Cost of debt	8.60% - 14.70%	11.65%
WACC	11.3% - 14.8%	13.1%

WACC

540405.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.86	0.98

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.00%	17.00%

Tax rate	23.80%	25.80%
Debt/Equity ratio	0.57	0.57
Cost of debt	8.60%	14.70%

After-tax WACC	11.3%	14.8%


Selected WACC	13.1%

540405.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 540405.BO:

cost_of_equity (15.50%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.86) + 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.