BASML.NS WACC - Weighted Average Cost of Capital

The WACC of Bannari Amman Spinning Mills Ltd (BASML.NS) is 13.2%.

The Cost of Equity of Bannari Amman Spinning Mills Ltd (BASML.NS) is 19.55%.

The Cost of Debt of Bannari Amman Spinning Mills Ltd (BASML.NS) is 14.00%.

	Range	Selected
Cost of equity	17.40% - 21.70%	19.55%
Tax rate	27.30% - 30.80%	29.05%
Cost of debt	9.40% - 18.60%	14.00%
WACC	10.4% - 15.9%	13.2%

WACC

BASML.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.26	1.49

Additional risk adjustments	0.0%	0.5%
Cost of equity	17.40%	21.70%

Tax rate	27.30%	30.80%
Debt/Equity ratio	1.93	1.93
Cost of debt	9.40%	18.60%

After-tax WACC	10.4%	15.9%


Selected WACC	13.2%

BASML.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 BASML.NS:

cost_of_equity (19.55%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.26) + 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.