The WACC of BKM Industries Ltd (BKMINDST.NS) is 10.2%.
| Range | Selected | |
| Cost of equity | 19.60% - 49.20% | 34.40% |
| Tax rate | 3.80% - 6.50% | 5.15% |
| Cost of debt | 7.00% - 10.40% | 8.70% |
| WACC | 7.7% - 12.7% | 10.2% |
| Category | Low | High |
| Long-term bond rate | 6.9% | 7.4% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 1.53 | 4.44 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 19.60% | 49.20% |
| 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% | 12.7% |
| Selected WACC | 10.2% | |
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 (34.40%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.53) + 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.