The WACC of Anmol India Ltd (542437.BO) is 11.4%.
| Range | Selected | |
| Cost of equity | 11.50% - 15.00% | 13.25% |
| Tax rate | 31.10% - 33.30% | 32.20% |
| Cost of debt | 8.70% - 9.80% | 9.25% |
| WACC | 10.0% - 12.8% | 11.4% |
| Category | Low | High |
| Long-term bond rate | 7.5% | 8.0% |
| Equity market risk premium | 6.9% | 7.9% |
| Adjusted beta | 0.57 | 0.82 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 11.50% | 15.00% |
| Tax rate | 31.10% | 33.30% |
| Debt/Equity ratio | 0.36 | 0.36 |
| Cost of debt | 8.70% | 9.80% |
| After-tax WACC | 10.0% | 12.8% |
| Selected WACC | 11.4% | |
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 542437.BO:
cost_of_equity (13.25%) = risk_free_rate (7.75%) + equity_risk_premium (7.40%) * adjusted_beta (0.57) + 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.