542248.BO WACC - Weighted Average Cost of Capital

The WACC of Deccan Health Care Ltd (542248.BO) is 14.6%.

The Cost of Equity of Deccan Health Care Ltd (542248.BO) is 14.85%.

The Cost of Debt of Deccan Health Care Ltd (542248.BO) is 6.40%.

	Range	Selected
Cost of equity	13.30% - 16.40%	14.85%
Tax rate	28.20% - 31.30%	29.75%
Cost of debt	5.80% - 7.00%	6.40%
WACC	13.1% - 16.1%	14.6%

WACC

542248.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.77	0.91

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.30%	16.40%

Tax rate	28.20%	31.30%
Debt/Equity ratio	0.02	0.02
Cost of debt	5.80%	7.00%

After-tax WACC	13.1%	16.1%


Selected WACC	14.6%

542248.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 542248.BO:

cost_of_equity (14.85%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.77) + 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.