540590.BO WACC - Weighted Average Cost of Capital
The WACC of Riddhi Corporate Services Ltd (540590.BO) is 11.8%.
| Range | Selected | |
| Cost of equity | 19.1% - 25.0% | 22.05% |
| Tax rate | 29.3% - 33.3% | 31.3% |
| Cost of debt | 7.6% - 8.1% | 7.85% |
| WACC | 10.7% - 13.0% | 11.8% |
| Category | Low | High |
| Long-term bond rate | 6.9% | 7.4% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 1.47 | 1.84 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 19.1% | 25.0% |
| Tax rate | 29.3% | 33.3% |
| Debt/Equity ratio | 1.59 | 1.59 |
| Cost of debt | 7.6% | 8.1% |
| After-tax WACC | 10.7% | 13.0% |
| Selected WACC | 11.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 540590.BO | Riddhi Corporate Services Ltd | 1.59 | 0.19 | 0.09 |
| 526433.BO | ASM Technologies Ltd | 0.05 | 0.64 | 0.62 |
| AIRAN.NS | Airan Ltd | 0 | 0.85 | 0.85 |
| ALANKIT.NS | Alankit Ltd | 0.12 | 1.51 | 1.4 |
| DATAMATICS.NS | Datamatics Global Services Ltd | 0.01 | 1.62 | 1.62 |
| GENESYS.NS | Genesys International Corporation Ltd | 0.02 | 1.6 | 1.58 |
| INFIBEAM.NS | Infibeam Avenues Ltd | 0 | 0.98 | 0.98 |
| ONEPOINT.NS | One Point One Solutions Ltd | 0.04 | 0.79 | 0.77 |
| VAKRANGEE.NS | Vakrangee Ltd | 0.01 | 0.26 | 0.26 |
| XCHANGING.NS | Xchanging Solutions Ltd | 0 | 1.23 | 1.23 |
| Low | High | |
| Unlevered beta | 0.82 | 1.08 |
| Relevered beta | 1.7 | 2.25 |
| Adjusted relevered beta | 1.47 | 1.84 |
540590.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 540590.BO:
cost_of_equity (22.05%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.47) + 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.