LOKESHMACH.NS WACC - Weighted Average Cost of Capital

The WACC of Lokesh Machines Ltd (LOKESHMACH.NS) is 14.0%.

The Cost of Equity of Lokesh Machines Ltd (LOKESHMACH.NS) is 15.15%.

The Cost of Debt of Lokesh Machines Ltd (LOKESHMACH.NS) is 15.80%.

	Range	Selected
Cost of equity	13.30% - 17.00%	15.15%
Tax rate	32.50% - 32.90%	32.70%
Cost of debt	13.00% - 18.60%	15.80%
WACC	12.2% - 15.9%	14.0%

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	0.77	0.98

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.30%	17.00%

Tax rate	32.50%	32.90%
Debt/Equity ratio	0.33	0.33
Cost of debt	13.00%	18.60%

After-tax WACC	12.2%	15.9%


Selected WACC	14.0%

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 (15.15%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.77) + 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.