540590.BO
Riddhi Corporate Services Ltd
Price:  
65.35 
INR
Volume:  
9,674
India | IT Services

540590.BO WACC - Weighted Average Cost of Capital

The WACC of Riddhi Corporate Services Ltd (540590.BO) is 13.2%.

The Cost of Equity of Riddhi Corporate Services Ltd (540590.BO) is 23.4%.
The Cost of Debt of Riddhi Corporate Services Ltd (540590.BO) is 6.55%.

RangeSelected
Cost of equity20.9% - 25.9%23.4%
Tax rate24.8% - 28.0%26.4%
Cost of debt4.0% - 9.1%6.55%
WACC11.1% - 15.3%13.2%
WACC

540590.BO WACC calculation

CategoryLowHigh
Long-term bond rate6.9%7.4%
Equity market risk premium8.3%9.3%
Adjusted beta1.691.94
Additional risk adjustments0.0%0.5%
Cost of equity20.9%25.9%
Tax rate24.8%28.0%
Debt/Equity ratio
1.211.21
Cost of debt4.0%9.1%
After-tax WACC11.1%15.3%
Selected WACC13.2%

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 (23.40%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.69) + 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.