BOMDYEING.NS WACC - Weighted Average Cost of Capital

The WACC of Bombay Dyeing and Mfg Co Ltd (BOMDYEING.NS) is 15.0%.

The Cost of Equity of Bombay Dyeing and Mfg Co Ltd (BOMDYEING.NS) is 14.95%.

The Cost of Debt of Bombay Dyeing and Mfg Co Ltd (BOMDYEING.NS) is 81.30%.

	Range	Selected
Cost of equity	13.60% - 16.30%	14.95%
Tax rate	11.30% - 15.70%	13.50%
Cost of debt	7.50% - 155.10%	81.30%
WACC	13.6% - 16.4%	15.0%

WACC

BOMDYEING.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.81	0.91

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.60%	16.30%

Tax rate	11.30%	15.70%
Debt/Equity ratio	0	0
Cost of debt	7.50%	155.10%

After-tax WACC	13.6%	16.4%


Selected WACC	15.0%

BOMDYEING.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 BOMDYEING.NS:

cost_of_equity (14.95%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.81) + 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.