The WACC of Thomas Scott (India) Ltd (THOMASCOTT.NS) is 24.9%.
Range | Selected | |
Cost of equity | 11.80% - 15.10% | 13.45% |
Tax rate | 7.30% - 13.80% | 10.55% |
Cost of debt | 7.80% - 847.90% | 427.85% |
WACC | 11.6% - 38.2% | 24.9% |
Category | Low | High |
Long-term bond rate | 6.9% | 7.4% |
Equity market risk premium | 8.3% | 9.3% |
Adjusted beta | 0.59 | 0.78 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 11.80% | 15.10% |
Tax rate | 7.30% | 13.80% |
Debt/Equity ratio | 0.03 | 0.03 |
Cost of debt | 7.80% | 847.90% |
After-tax WACC | 11.6% | 38.2% |
Selected WACC | 24.9% | |
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 THOMASCOTT.NS:
cost_of_equity (13.45%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.59) + 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.