The WACC of Akshar Spintex Ltd (541303.BO) is 11.9%.
| Range | Selected | |
| Cost of equity | 11.30% - 13.40% | 12.35% |
| Tax rate | 26.30% - 33.10% | 29.70% |
| Cost of debt | 8.60% - 10.30% | 9.45% |
| WACC | 10.9% - 12.9% | 11.9% |
| Category | Low | High |
| Long-term bond rate | 7.5% | 8.0% |
| Equity market risk premium | 6.9% | 7.9% |
| Adjusted beta | 0.55 | 0.62 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 11.30% | 13.40% |
| Tax rate | 26.30% | 33.10% |
| Debt/Equity ratio | 0.09 | 0.09 |
| Cost of debt | 8.60% | 10.30% |
| After-tax WACC | 10.9% | 12.9% |
| Selected WACC | 11.9% | |
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 541303.BO:
cost_of_equity (12.35%) = risk_free_rate (7.75%) + equity_risk_premium (7.40%) * adjusted_beta (0.55) + 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.