540735.BO WACC - Weighted Average Cost of Capital

The WACC of IRIS Business Services Ltd (540735.BO) is 13.0%.

The Cost of Equity of IRIS Business Services Ltd (540735.BO) is 13.10%.

The Cost of Debt of IRIS Business Services Ltd (540735.BO) is 11.50%.

	Range	Selected
Cost of equity	11.50% - 14.70%	13.10%
Tax rate	13.40% - 14.30%	13.85%
Cost of debt	10.60% - 12.40%	11.50%
WACC	11.5% - 14.6%	13.0%

WACC

540735.BO WACC calculation

Category	Low	High

Long-term bond rate	7.5%	8.0%
Equity market risk premium	6.9%	7.9%
Adjusted beta	0.58	0.79

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.50%	14.70%

Tax rate	13.40%	14.30%
Debt/Equity ratio	0.04	0.04
Cost of debt	10.60%	12.40%

After-tax WACC	11.5%	14.6%


Selected WACC	13.0%

540735.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 540735.BO:

cost_of_equity (13.10%) = risk_free_rate (7.75%) + equity_risk_premium (7.40%) * adjusted_beta (0.58) + 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.