LUMAXTECH.NS WACC - Weighted Average Cost of Capital

The WACC of Lumax AutoTechnologies Ltd (LUMAXTECH.NS) is 16.4%.

The Cost of Equity of Lumax AutoTechnologies Ltd (LUMAXTECH.NS) is 17.05%.

The Cost of Debt of Lumax AutoTechnologies Ltd (LUMAXTECH.NS) is 13.50%.

	Range	Selected
Cost of equity	15.80% - 18.30%	17.05%
Tax rate	26.10% - 26.80%	26.45%
Cost of debt	8.10% - 18.90%	13.50%
WACC	14.9% - 17.9%	16.4%

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	1.08	1.13

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.80%	18.30%

Tax rate	26.10%	26.80%
Debt/Equity ratio	0.1	0.1
Cost of debt	8.10%	18.90%

After-tax WACC	14.9%	17.9%


Selected WACC	16.4%

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 (17.05%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.08) + 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.