BSHSL.NS WACC - Weighted Average Cost of Capital

The WACC of Bombay Super Hybrid Seeds Ltd (BSHSL.NS) is 12.7%.

The Cost of Equity of Bombay Super Hybrid Seeds Ltd (BSHSL.NS) is 12.85%.

The Cost of Debt of Bombay Super Hybrid Seeds Ltd (BSHSL.NS) is 8.30%.

	Range	Selected
Cost of equity	10.40% - 15.30%	12.85%
Tax rate	5.40% - 5.70%	5.55%
Cost of debt	8.10% - 8.50%	8.30%
WACC	10.3% - 15.1%	12.7%

WACC

BSHSL.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.43	0.8

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.40%	15.30%

Tax rate	5.40%	5.70%
Debt/Equity ratio	0.03	0.03
Cost of debt	8.10%	8.50%

After-tax WACC	10.3%	15.1%


Selected WACC	12.7%

BSHSL.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 BSHSL.NS:

cost_of_equity (12.85%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.43) + 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.