JBMA.NS WACC - Weighted Average Cost of Capital

The WACC of JBM Auto Ltd (JBMA.NS) is 15.7%.

The Cost of Equity of JBM Auto Ltd (JBMA.NS) is 16.90%.

The Cost of Debt of JBM Auto Ltd (JBMA.NS) is 9.95%.

	Range	Selected
Cost of equity	15.40% - 18.40%	16.90%
Tax rate	24.20% - 30.00%	27.10%
Cost of debt	9.40% - 10.50%	9.95%
WACC	14.4% - 17.1%	15.7%

WACC

JBMA.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.02	1.13

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.40%	18.40%

Tax rate	24.20%	30.00%
Debt/Equity ratio	0.14	0.14
Cost of debt	9.40%	10.50%

After-tax WACC	14.4%	17.1%


Selected WACC	15.7%

JBMA.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 JBMA.NS:

cost_of_equity (16.90%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.02) + 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.