Great post! Only thing I think which should be changed in this calculation is WACC. Cost of debt can be linked to AAA rated bonds which is around 6-8% in India and cost of equity would be higher. Though cost of equity will be roughly in the range of 11-17% as per the last EY report, safe bet to take roughly 14% which was kind of average they mentioned in the report. Further, WACC will need to be calculated using weighted average of debt and equity proportion for that particular company. Normally I don’t like companies with huge debts so I filter that already in screener, so ultimately, my cost of capital gets very near to cost of equity which is around 13-14%.
| Subscribe To Our Free Newsletter |
