The WACC of AMD Industries Ltd (AMDIND.NS) is 14.4%.
| Range | Selected | |
| Cost of equity | 17.20% - 22.60% | 19.90% |
| Tax rate | 22.40% - 24.50% | 23.45% |
| Cost of debt | 9.90% - 12.10% | 11.00% |
| WACC | 12.7% - 16.2% | 14.4% |
| Category | Low | High |
| Long-term bond rate | 6.9% | 7.4% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 1.25 | 1.59 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 17.20% | 22.60% |
| Tax rate | 22.40% | 24.50% |
| Debt/Equity ratio | 0.92 | 0.92 |
| Cost of debt | 9.90% | 12.10% |
| After-tax WACC | 12.7% | 16.2% |
| Selected WACC | 14.4% | |
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 AMDIND.NS:
cost_of_equity (19.90%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.25) + 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.