The WACC of Compuage Infocom Ltd (COMPINFO.NS) is 8.1%.
| Range | Selected | |
| Cost of equity | 27.10% - 53.40% | 40.25% |
| Tax rate | 0.60% - 10.80% | 5.70% |
| Cost of debt | 7.00% - 9.00% | 8.00% |
| WACC | 7.3% - 8.9% | 8.1% |
| Category | Low | High |
| Long-term bond rate | 6.9% | 7.4% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 2.43 | 4.9 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 27.10% | 53.40% |
| Tax rate | 0.60% | 10.80% |
| Debt/Equity ratio | 55.45 | 55.45 |
| Cost of debt | 7.00% | 9.00% |
| After-tax WACC | 7.3% | 8.9% |
| Selected WACC | 8.1% | |
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 COMPINFO.NS:
cost_of_equity (40.25%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (2.43) + 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.