504132.BO WACC - Weighted Average Cost of Capital

The WACC of Permanent Magnets Ltd (504132.BO) is 13.3%.

The Cost of Equity of Permanent Magnets Ltd (504132.BO) is 13.60%.

The Cost of Debt of Permanent Magnets Ltd (504132.BO) is 9.35%.

	Range	Selected
Cost of equity	12.20% - 15.00%	13.60%
Tax rate	25.50% - 25.70%	25.60%
Cost of debt	7.50% - 11.20%	9.35%
WACC	11.9% - 14.7%	13.3%

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	0.64	0.76

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.20%	15.00%

Tax rate	25.50%	25.70%
Debt/Equity ratio	0.04	0.04
Cost of debt	7.50%	11.20%

After-tax WACC	11.9%	14.7%


Selected WACC	13.3%

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 (13.60%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.64) + 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.