The WACC of GEE Ltd (504028.BO) is 14.0%.
| Range | Selected | |
| Cost of equity | 12.80% - 15.30% | 14.05% |
| Tax rate | 25.00% - 27.20% | 26.10% |
| Cost of debt | 10.10% - 26.90% | 18.50% |
| WACC | 11.9% - 16.0% | 14.0% |
| Category | Low | High |
| Long-term bond rate | 6.9% | 7.4% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 0.71 | 0.8 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 12.80% | 15.30% |
| Tax rate | 25.00% | 27.20% |
| Debt/Equity ratio | 0.2 | 0.2 |
| Cost of debt | 10.10% | 26.90% |
| After-tax WACC | 11.9% | 16.0% |
| Selected WACC | 14.0% | |
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 504028.BO:
cost_of_equity (14.05%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.71) + 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.