BASML.NS WACC - Weighted Average Cost of Capital

The WACC of Bannari Amman Spinning Mills Ltd (BASML.NS) is 15.3%.

The Cost of Equity of Bannari Amman Spinning Mills Ltd (BASML.NS) is 20.05%.

The Cost of Debt of Bannari Amman Spinning Mills Ltd (BASML.NS) is 18.55%.

	Range	Selected
Cost of equity	18.00% - 22.10%	20.05%
Tax rate	27.30% - 30.80%	29.05%
Cost of debt	10.20% - 26.90%	18.55%
WACC	10.9% - 19.8%	15.3%

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	1.34	1.53

Additional risk adjustments	0.0%	0.5%
Cost of equity	18.00%	22.10%

Tax rate	27.30%	30.80%
Debt/Equity ratio	2.01	2.01
Cost of debt	10.20%	26.90%

After-tax WACC	10.9%	19.8%


Selected WACC	15.3%

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 (20.05%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.34) + 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.