OMAXAUTO.NS WACC - Weighted Average Cost of Capital

The WACC of Omax Autos Ltd (OMAXAUTO.NS) is 15.5%.

The Cost of Equity of Omax Autos Ltd (OMAXAUTO.NS) is 20.10%.

The Cost of Debt of Omax Autos Ltd (OMAXAUTO.NS) is 5.90%.

	Range	Selected
Cost of equity	18.10% - 22.10%	20.10%
Tax rate	24.20% - 34.90%	29.55%
Cost of debt	4.20% - 7.60%	5.90%
WACC	13.8% - 17.2%	15.5%

WACC

OMAXAUTO.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.35	1.53

Additional risk adjustments	0.0%	0.5%
Cost of equity	18.10%	22.10%

Tax rate	24.20%	34.90%
Debt/Equity ratio	0.4	0.4
Cost of debt	4.20%	7.60%

After-tax WACC	13.8%	17.2%


Selected WACC	15.5%

OMAXAUTO.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 OMAXAUTO.NS:

cost_of_equity (20.10%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.35) + 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.