BRFL.NS WACC - Weighted Average Cost of Capital

The WACC of Bombay Rayon Fashions Ltd (BRFL.NS) is 4.8%.

The Cost of Equity of Bombay Rayon Fashions Ltd (BRFL.NS) is 60.40%.

The Cost of Debt of Bombay Rayon Fashions Ltd (BRFL.NS) is 5.55%.

	Range	Selected
Cost of equity	41.00% - 79.80%	60.40%
Tax rate	26.70% - 32.20%	29.45%
Cost of debt	4.10% - 7.00%	5.55%
WACC	3.6% - 5.9%	4.8%

WACC

BRFL.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	4.11	7.73

Additional risk adjustments	0.0%	0.5%
Cost of equity	41.00%	79.80%

Tax rate	26.70%	32.20%
Debt/Equity ratio	61.89	61.89
Cost of debt	4.10%	7.00%

After-tax WACC	3.6%	5.9%


Selected WACC	4.8%

BRFL.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 BRFL.NS:

cost_of_equity (60.40%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (4.11) + 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.