542123.BO WACC - Weighted Average Cost of Capital

The WACC of Phosphate Company Ltd (542123.BO) is 12.2%.

The Cost of Equity of Phosphate Company Ltd (542123.BO) is 13.70%.

The Cost of Debt of Phosphate Company Ltd (542123.BO) is 11.95%.

	Range	Selected
Cost of equity	10.70% - 16.70%	13.70%
Tax rate	28.60% - 31.60%	30.10%
Cost of debt	9.10% - 14.80%	11.95%
WACC	9.6% - 14.9%	12.2%

WACC

542123.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.46	0.94

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.70%	16.70%

Tax rate	28.60%	31.60%
Debt/Equity ratio	0.37	0.37
Cost of debt	9.10%	14.80%

After-tax WACC	9.6%	14.9%


Selected WACC	12.2%

542123.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 542123.BO:

cost_of_equity (13.70%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.46) + 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.