JBMA.NS WACC - Weighted Average Cost of Capital

The WACC of JBM Auto Ltd (JBMA.NS) is 15.4%.

The Cost of Equity of JBM Auto Ltd (JBMA.NS) is 16.75%.

The Cost of Debt of JBM Auto Ltd (JBMA.NS) is 10.65%.

	Range	Selected
Cost of equity	14.60% - 18.90%	16.75%
Tax rate	21.40% - 22.20%	21.80%
Cost of debt	10.50% - 10.80%	10.65%
WACC	13.5% - 17.2%	15.4%

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	0.93	1.19

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.60%	18.90%

Tax rate	21.40%	22.20%
Debt/Equity ratio	0.2	0.2
Cost of debt	10.50%	10.80%

After-tax WACC	13.5%	17.2%


Selected WACC	15.4%

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 (16.75%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.93) + 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.