The WACC of Kellton Tech Solutions Ltd (KELLTONTEC.NS) is 13.6%.
Range | Selected | |
Cost of equity | 11.70% - 17.40% | 14.55% |
Tax rate | 13.70% - 16.50% | 15.10% |
Cost of debt | 8.10% - 10.30% | 9.20% |
WACC | 11.1% - 16.2% | 13.6% |
Category | Low | High |
Long-term bond rate | 6.9% | 7.4% |
Equity market risk premium | 8.3% | 9.3% |
Adjusted beta | 0.58 | 1.02 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 11.70% | 17.40% |
Tax rate | 13.70% | 16.50% |
Debt/Equity ratio | 0.15 | 0.15 |
Cost of debt | 8.10% | 10.30% |
After-tax WACC | 11.1% | 16.2% |
Selected WACC | 13.6% | |
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 KELLTONTEC.NS:
cost_of_equity (14.55%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.58) + 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.