The WACC of UFO Moviez India Ltd (UFO.NS) is 13.4%.
| Range | Selected | |
| Cost of equity | 13.30% - 17.00% | 15.15% |
| Tax rate | 20.70% - 24.40% | 22.55% |
| Cost of debt | 7.60% - 10.00% | 8.80% |
| WACC | 11.8% - 15.0% | 13.4% |
| Category | Low | High |
| Long-term bond rate | 6.9% | 7.4% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 0.78 | 0.98 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 13.30% | 17.00% |
| Tax rate | 20.70% | 24.40% |
| Debt/Equity ratio | 0.28 | 0.28 |
| Cost of debt | 7.60% | 10.00% |
| After-tax WACC | 11.8% | 15.0% |
| Selected WACC | 13.4% | |
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 UFO.NS:
cost_of_equity (15.15%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.78) + 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.