BOMDYEING.NS WACC - Weighted Average Cost of Capital

The WACC of Bombay Dyeing and Mfg Co Ltd (BOMDYEING.NS) is 16.5%.

The Cost of Equity of Bombay Dyeing and Mfg Co Ltd (BOMDYEING.NS) is 16.55%.

The Cost of Debt of Bombay Dyeing and Mfg Co Ltd (BOMDYEING.NS) is 9.85%.

	Range	Selected
Cost of equity	15.10% - 18.00%	16.55%
Tax rate	11.30% - 16.00%	13.65%
Cost of debt	7.90% - 11.80%	9.85%
WACC	15.1% - 18.0%	16.5%

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	0.99	1.09

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.10%	18.00%

Tax rate	11.30%	16.00%
Debt/Equity ratio	0	0
Cost of debt	7.90%	11.80%

After-tax WACC	15.1%	18.0%


Selected WACC	16.5%

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 (16.55%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.99) + 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.