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 23.40%.

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

	Range	Selected
Cost of equity	20.90% - 25.90%	23.40%
Tax rate	24.80% - 28.00%	26.40%
Cost of debt	4.00% - 9.10%	6.55%
WACC	11.1% - 15.3%	13.2%

WACC

540590.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.69	1.94

Additional risk adjustments	0.0%	0.5%
Cost of equity	20.90%	25.90%

Tax rate	24.80%	28.00%
Debt/Equity ratio	1.21	1.21
Cost of debt	4.00%	9.10%

After-tax WACC	11.1%	15.3%


Selected WACC	13.2%

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.