The WACC of Angel Fibers Ltd (541006.BO) is 12.0%.
| Range | Selected | |
| Cost of equity | 17.20% - 27.60% | 22.40% |
| Tax rate | 14.00% - 36.80% | 25.40% |
| Cost of debt | 7.10% - 10.50% | 8.80% |
| WACC | 10.0% - 14.0% | 12.0% |
| Category | Low | High |
| Long-term bond rate | 6.9% | 7.4% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 1.25 | 2.11 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 17.20% | 27.60% |
| Tax rate | 14.00% | 36.80% |
| Debt/Equity ratio | 1.84 | 1.84 |
| Cost of debt | 7.10% | 10.50% |
| After-tax WACC | 10.0% | 14.0% |
| Selected WACC | 12.0% | |
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 541006.BO:
cost_of_equity (22.40%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.25) + 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.