The WACC of Tranway Technologies Ltd (542923.BO) is 11.1%.
| Range | Selected | |
| Cost of equity | 8.40% - 11.20% | 9.80% |
| Tax rate | 18.20% - 20.40% | 19.30% |
| Cost of debt | 4.50% - 26.90% | 15.70% |
| WACC | 6.2% - 16.1% | 11.1% |
| Category | Low | High |
| Long-term bond rate | 6.9% | 7.4% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 0.19 | 0.36 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.40% | 11.20% |
| Tax rate | 18.20% | 20.40% |
| Debt/Equity ratio | 0.94 | 0.94 |
| Cost of debt | 4.50% | 26.90% |
| After-tax WACC | 6.2% | 16.1% |
| Selected WACC | 11.1% | |
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 542923.BO:
cost_of_equity (9.80%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.19) + 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.