LOTUSEYE.NS WACC - Weighted Average Cost of Capital

The WACC of Lotus Eye Hospital and Institute Ltd (LOTUSEYE.NS) is 12.2%.

The Cost of Equity of Lotus Eye Hospital and Institute Ltd (LOTUSEYE.NS) is 12.20%.

The Cost of Debt of Lotus Eye Hospital and Institute Ltd (LOTUSEYE.NS) is 11.75%.

	Range	Selected
Cost of equity	10.80% - 13.60%	12.20%
Tax rate	27.00% - 27.20%	27.10%
Cost of debt	7.60% - 15.90%	11.75%
WACC	10.7% - 13.6%	12.2%

WACC

LOTUSEYE.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.47	0.62

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.80%	13.60%

Tax rate	27.00%	27.20%
Debt/Equity ratio	0.01	0.01
Cost of debt	7.60%	15.90%

After-tax WACC	10.7%	13.6%


Selected WACC	12.2%

LOTUSEYE.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 LOTUSEYE.NS:

cost_of_equity (12.20%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.47) + 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.