522650.BO WACC - Weighted Average Cost of Capital

The WACC of Bemco Hydraulics Ltd (522650.BO) is 12.3%.

The Cost of Equity of Bemco Hydraulics Ltd (522650.BO) is 12.40%.

The Cost of Debt of Bemco Hydraulics Ltd (522650.BO) is 13.75%.

	Range	Selected
Cost of equity	10.70% - 14.10%	12.40%
Tax rate	28.40% - 30.30%	29.35%
Cost of debt	7.80% - 19.70%	13.75%
WACC	10.5% - 14.1%	12.3%

WACC

522650.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.47	0.67

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.70%	14.10%

Tax rate	28.40%	30.30%
Debt/Equity ratio	0.05	0.05
Cost of debt	7.80%	19.70%

After-tax WACC	10.5%	14.1%


Selected WACC	12.3%

522650.BO'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 522650.BO:

cost_of_equity (12.40%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.47) + 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.