The WACC of Expleo Solutions Ltd (EXPLEOSOL.NS) is 17.3%.
Range | Selected | |
Cost of equity | 14.0% - 20.7% | 17.35% |
Tax rate | 25.6% - 25.9% | 25.75% |
Cost of debt | 7.5% - 13.2% | 10.35% |
WACC | 13.9% - 20.6% | 17.3% |
Category | Low | High |
Long-term bond rate | 6.9% | 7.4% |
Equity market risk premium | 8.3% | 9.3% |
Adjusted beta | 0.86 | 1.38 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 14.0% | 20.7% |
Tax rate | 25.6% | 25.9% |
Debt/Equity ratio | 0.01 | 0.01 |
Cost of debt | 7.5% | 13.2% |
After-tax WACC | 13.9% | 20.6% |
Selected WACC | 17.3% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
EXPLEOSOL.NS | Expleo Solutions Ltd | 0.01 | 1.04 | 1.03 |
538891.BO | Magellanic Cloud Ltd | 0.06 | -0.81 | -0.78 |
ADSL.NS | Allied Digital Services Ltd | 0.07 | 1.56 | 1.48 |
CYBERTECH.NS | Cybertech Systems and Software Ltd | 0.02 | 1.8 | 1.78 |
DSSL.NS | Dynacons Systems and Solutions Ltd | 0.1 | 1.8 | 1.67 |
GTL.NS | GTL Ltd | 32.59 | 1.42 | 0.06 |
ONWARDTEC.NS | Onward Technologies Ltd | 0.03 | 2.05 | 2 |
SAKSOFT.NS | Saksoft Ltd | 0.03 | 1.7 | 1.67 |
SILVERTUC.NS | Silver Touch Technologies Ltd | 0.01 | 0.42 | 0.42 |
TERASOFT.NS | Tera Software Ltd | 0.06 | 0.11 | 0.1 |
Low | High | |
Unlevered beta | 0.79 | 1.55 |
Relevered beta | 0.79 | 1.57 |
Adjusted relevered beta | 0.86 | 1.38 |
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 EXPLEOSOL.NS:
cost_of_equity (17.35%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.86) + 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.