LINCOLN.NS WACC - Weighted Average Cost of Capital

The WACC of Lincoln Pharmaceuticals Ltd (LINCOLN.NS) is 33.0%.

The Cost of Equity of Lincoln Pharmaceuticals Ltd (LINCOLN.NS) is 17.35%.

The Cost of Debt of Lincoln Pharmaceuticals Ltd (LINCOLN.NS) is 66.10%.

	Range	Selected
Cost of equity	14.30% - 20.40%	17.35%
Tax rate	25.20% - 26.40%	25.80%
Cost of debt	7.50% - 124.70%	66.10%
WACC	10.0% - 56.1%	33.0%

WACC

LINCOLN.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.9	1.35

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.30%	20.40%

Tax rate	25.20%	26.40%
Debt/Equity ratio	1	1
Cost of debt	7.50%	124.70%

After-tax WACC	10.0%	56.1%


Selected WACC	33.0%

LINCOLN.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 LINCOLN.NS:

cost_of_equity (17.35%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.9) + 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.