The WACC of BKM Industries Ltd (BKMINDST.NS) is 10.1%.
| Range | Selected | |
| Cost of equity | 20.20% - 45.30% | 32.75% |
| Tax rate | 3.80% - 6.50% | 5.15% |
| Cost of debt | 7.00% - 10.40% | 8.70% |
| WACC | 7.7% - 12.4% | 10.1% |
| Category | Low | High |
| Long-term bond rate | 6.9% | 7.4% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 1.6 | 4.02 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 20.20% | 45.30% |
| Tax rate | 3.80% | 6.50% |
| Debt/Equity ratio | 12.4 | 12.4 |
| Cost of debt | 7.00% | 10.40% |
| After-tax WACC | 7.7% | 12.4% |
| Selected WACC | 10.1% | |
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 BKMINDST.NS:
cost_of_equity (32.75%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.6) + 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.