LINCOLN.NS WACC - Weighted Average Cost of Capital

The WACC of Lincoln Pharmaceuticals Ltd (LINCOLN.NS) is 33.1%.

The Cost of Equity of Lincoln Pharmaceuticals Ltd (LINCOLN.NS) is 17.45%.

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

	Range	Selected
Cost of equity	14.30% - 20.60%	17.45%
Tax rate	25.20% - 26.40%	25.80%
Cost of debt	7.50% - 124.70%	66.10%
WACC	9.9% - 56.2%	33.1%

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	0.89	1.37

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.30%	20.60%

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

After-tax WACC	9.9%	56.2%


Selected WACC	33.1%

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 (17.45%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.89) + 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.