BASML.NS WACC - Weighted Average Cost of Capital

The WACC of Bannari Amman Spinning Mills Ltd (BASML.NS) is 13.4%.

The Cost of Equity of Bannari Amman Spinning Mills Ltd (BASML.NS) is 19.95%.

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

	Range	Selected
Cost of equity	17.90% - 22.00%	19.95%
Tax rate	27.30% - 30.80%	29.05%
Cost of debt	9.40% - 18.60%	14.00%
WACC	10.6% - 16.1%	13.4%

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	1.32	1.52

Additional risk adjustments	0.0%	0.5%
Cost of equity	17.90%	22.00%

Tax rate	27.30%	30.80%
Debt/Equity ratio	1.89	1.89
Cost of debt	9.40%	18.60%

After-tax WACC	10.6%	16.1%


Selected WACC	13.4%

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 (19.95%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.32) + 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.