LUMAXIND.NS
Lumax Industries Ltd
Price:  
2,811.2 
INR
Volume:  
3,068
India | Auto Components

LUMAXIND.NS WACC - Weighted Average Cost of Capital

The WACC of Lumax Industries Ltd (LUMAXIND.NS) is 15.7%.

The Cost of Equity of Lumax Industries Ltd (LUMAXIND.NS) is 18.45%.
The Cost of Debt of Lumax Industries Ltd (LUMAXIND.NS) is 8.15%.

RangeSelected
Cost of equity16.8% - 20.1%18.45%
Tax rate27.3% - 30.5%28.9%
Cost of debt7.2% - 9.1%8.15%
WACC14.3% - 17.1%15.7%
WACC

LUMAXIND.NS WACC calculation

CategoryLowHigh
Long-term bond rate6.9%7.4%
Equity market risk premium8.3%9.3%
Adjusted beta1.191.31
Additional risk adjustments0.0%0.5%
Cost of equity16.8%20.1%
Tax rate27.3%30.5%
Debt/Equity ratio
0.270.27
Cost of debt7.2%9.1%
After-tax WACC14.3%17.1%
Selected WACC15.7%

LUMAXIND.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 LUMAXIND.NS:

cost_of_equity (18.45%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.19) + 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.