531041.BO WACC - Weighted Average Cost of Capital

The WACC of Competent Automobiles Company Ltd (531041.BO) is 9.6%.

The Cost of Equity of Competent Automobiles Company Ltd (531041.BO) is 16.05%.

The Cost of Debt of Competent Automobiles Company Ltd (531041.BO) is 8.45%.

	Range	Selected
Cost of equity	13.20% - 18.90%	16.05%
Tax rate	28.40% - 28.70%	28.55%
Cost of debt	6.40% - 10.50%	8.45%
WACC	7.6% - 11.5%	9.6%

WACC

531041.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.76	1.19

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.20%	18.90%

Tax rate	28.40%	28.70%
Debt/Equity ratio	1.82	1.82
Cost of debt	6.40%	10.50%

After-tax WACC	7.6%	11.5%


Selected WACC	9.6%

531041.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 531041.BO:

cost_of_equity (16.05%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.76) + 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.