539196.BO WACC - Weighted Average Cost of Capital

The WACC of Amba Enterprises Ltd (539196.BO) is 13.1%.

The Cost of Equity of Amba Enterprises Ltd (539196.BO) is 13.70%.

The Cost of Debt of Amba Enterprises Ltd (539196.BO) is 5.75%.

	Range	Selected
Cost of equity	12.30% - 15.10%	13.70%
Tax rate	25.90% - 26.90%	26.40%
Cost of debt	4.00% - 7.50%	5.75%
WACC	11.7% - 14.5%	13.1%

WACC

539196.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.65	0.78

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.30%	15.10%

Tax rate	25.90%	26.90%
Debt/Equity ratio	0.07	0.07
Cost of debt	4.00%	7.50%

After-tax WACC	11.7%	14.5%


Selected WACC	13.1%

539196.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 539196.BO:

cost_of_equity (13.70%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.65) + 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.