LUMAXTECH.NS WACC - Weighted Average Cost of Capital

The WACC of Lumax AutoTechnologies Ltd (LUMAXTECH.NS) is 15.8%.

The Cost of Equity of Lumax AutoTechnologies Ltd (LUMAXTECH.NS) is 17.50%.

The Cost of Debt of Lumax AutoTechnologies Ltd (LUMAXTECH.NS) is 8.60%.

	Range	Selected
Cost of equity	16.10% - 18.90%	17.50%
Tax rate	25.40% - 26.80%	26.10%
Cost of debt	8.10% - 9.10%	8.60%
WACC	14.6% - 17.0%	15.8%

WACC

LUMAXTECH.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.11	1.18

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.10%	18.90%

Tax rate	25.40%	26.80%
Debt/Equity ratio	0.18	0.18
Cost of debt	8.10%	9.10%

After-tax WACC	14.6%	17.0%


Selected WACC	15.8%

LUMAXTECH.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 LUMAXTECH.NS:

cost_of_equity (17.50%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.11) + 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.