542628.BO WACC - Weighted Average Cost of Capital

The WACC of Northern Spirits Ltd (542628.BO) is 10.0%.

The Cost of Equity of Northern Spirits Ltd (542628.BO) is 12.40%.

The Cost of Debt of Northern Spirits Ltd (542628.BO) is 9.75%.

	Range	Selected
Cost of equity	10.40% - 14.40%	12.40%
Tax rate	25.50% - 25.60%	25.55%
Cost of debt	9.10% - 10.40%	9.75%
WACC	8.7% - 11.3%	10.0%

WACC

542628.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.43	0.7

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.40%	14.40%

Tax rate	25.50%	25.60%
Debt/Equity ratio	0.85	0.85
Cost of debt	9.10%	10.40%

After-tax WACC	8.7%	11.3%


Selected WACC	10.0%

542628.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 542628.BO:

cost_of_equity (12.40%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.43) + 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.