504132.BO WACC - Weighted Average Cost of Capital

The WACC of Permanent Magnets Ltd (504132.BO) is 13.6%.

The Cost of Equity of Permanent Magnets Ltd (504132.BO) is 13.80%.

The Cost of Debt of Permanent Magnets Ltd (504132.BO) is 9.40%.

	Range	Selected
Cost of equity	12.40% - 15.20%	13.80%
Tax rate	25.50% - 25.70%	25.60%
Cost of debt	7.50% - 11.30%	9.40%
WACC	12.2% - 15.0%	13.6%

WACC

504132.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.66	0.78

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.40%	15.20%

Tax rate	25.50%	25.70%
Debt/Equity ratio	0.03	0.03
Cost of debt	7.50%	11.30%

After-tax WACC	12.2%	15.0%


Selected WACC	13.6%

504132.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 504132.BO:

cost_of_equity (13.80%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.66) + 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.