BANARBEADS.NS WACC - Weighted Average Cost of Capital

The WACC of Banaras Beads Ltd (BANARBEADS.NS) is 12.4%.

The Cost of Equity of Banaras Beads Ltd (BANARBEADS.NS) is 12.00%.

The Cost of Debt of Banaras Beads Ltd (BANARBEADS.NS) is 20.15%.

	Range	Selected
Cost of equity	10.50% - 13.50%	12.00%
Tax rate	24.30% - 24.90%	24.60%
Cost of debt	8.10% - 32.20%	20.15%
WACC	10.1% - 14.6%	12.4%

WACC

BANARBEADS.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.44	0.61

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.50%	13.50%

Tax rate	24.30%	24.90%
Debt/Equity ratio	0.11	0.11
Cost of debt	8.10%	32.20%

After-tax WACC	10.1%	14.6%


Selected WACC	12.4%

BANARBEADS.NS'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 BANARBEADS.NS:

cost_of_equity (12.00%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.44) + 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.