LAMBODHARA.NS WACC - Weighted Average Cost of Capital

The WACC of Lambodhara Textiles Ltd (LAMBODHARA.NS) is 13.0%.

The Cost of Equity of Lambodhara Textiles Ltd (LAMBODHARA.NS) is 15.80%.

The Cost of Debt of Lambodhara Textiles Ltd (LAMBODHARA.NS) is 8.00%.

	Range	Selected
Cost of equity	13.80% - 17.80%	15.80%
Tax rate	27.80% - 28.80%	28.30%
Cost of debt	6.00% - 10.00%	8.00%
WACC	11.2% - 14.8%	13.0%

WACC

LAMBODHARA.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.84	1.07

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.80%	17.80%

Tax rate	27.80%	28.80%
Debt/Equity ratio	0.38	0.38
Cost of debt	6.00%	10.00%

After-tax WACC	11.2%	14.8%


Selected WACC	13.0%

LAMBODHARA.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 LAMBODHARA.NS:

cost_of_equity (15.80%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.84) + 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.