531346.BO WACC - Weighted Average Cost of Capital

The WACC of Eastern Treads Ltd (531346.BO) is 15.8%.

The Cost of Equity of Eastern Treads Ltd (531346.BO) is 18.70%.

The Cost of Debt of Eastern Treads Ltd (531346.BO) is 16.15%.

	Range	Selected
Cost of equity	16.30% - 21.10%	18.70%
Tax rate	5.70% - 11.50%	8.60%
Cost of debt	8.40% - 23.90%	16.15%
WACC	10.5% - 21.1%	15.8%

WACC

531346.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.13	1.42

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.30%	21.10%

Tax rate	5.70%	11.50%
Debt/Equity ratio	2.22	2.22
Cost of debt	8.40%	23.90%

After-tax WACC	10.5%	21.1%


Selected WACC	15.8%

531346.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 531346.BO:

cost_of_equity (18.70%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.13) + 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.