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 12.25%.

The Cost of Debt of Lotus Eye Hospital and Institute Ltd (LOTUSEYE.NS) is 14.55%.

	Range	Selected
Cost of equity	10.80% - 13.70%	12.25%
Tax rate	27.30% - 27.60%	27.45%
Cost of debt	7.50% - 21.60%	14.55%
WACC	10.7% - 13.7%	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%	13.70%

Tax rate	27.30%	27.60%
Debt/Equity ratio	0.02	0.02
Cost of debt	7.50%	21.60%

After-tax WACC	10.7%	13.7%


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 (12.25%) = 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.