LOKESHMACH.NS WACC - Weighted Average Cost of Capital

The WACC of Lokesh Machines Ltd (LOKESHMACH.NS) is 15.0%.

The Cost of Equity of Lokesh Machines Ltd (LOKESHMACH.NS) is 17.05%.

The Cost of Debt of Lokesh Machines Ltd (LOKESHMACH.NS) is 12.90%.

	Range	Selected
Cost of equity	15.30% - 18.80%	17.05%
Tax rate	32.50% - 32.90%	32.70%
Cost of debt	12.10% - 13.70%	12.90%
WACC	13.6% - 16.4%	15.0%

WACC

LOKESHMACH.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.02	1.18

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.30%	18.80%

Tax rate	32.50%	32.90%
Debt/Equity ratio	0.33	0.33
Cost of debt	12.10%	13.70%

After-tax WACC	13.6%	16.4%


Selected WACC	15.0%

LOKESHMACH.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 LOKESHMACH.NS:

cost_of_equity (17.05%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.02) + 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.