506852.BO
Punjab Alkalies and Chemicals Ltd
Price:  
26.32 
INR
Volume:  
13,922.00
India | Chemicals
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506852.BO WACC - Weighted Average Cost of Capital

The WACC of Punjab Alkalies and Chemicals Ltd (506852.BO) is 14.9%.

The Cost of Equity of Punjab Alkalies and Chemicals Ltd (506852.BO) is 16.90%.
The Cost of Debt of Punjab Alkalies and Chemicals Ltd (506852.BO) is 10.80%.

Range Selected
Cost of equity 15.20% - 18.60% 16.90%
Tax rate 26.20% - 40.20% 33.20%
Cost of debt 9.10% - 12.50% 10.80%
WACC 13.5% - 16.4% 14.9%
WACC

506852.BO WACC calculation

Category Low High
Long-term bond rate 6.9% 7.4%
Equity market risk premium 8.3% 9.3%
Adjusted beta 1 1.16
Additional risk adjustments 0.0% 0.5%
Cost of equity 15.20% 18.60%
Tax rate 26.20% 40.20%
Debt/Equity ratio 0.25 0.25
Cost of debt 9.10% 12.50%
After-tax WACC 13.5% 16.4%
Selected WACC 14.9%

506852.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 506852.BO:

cost_of_equity (16.90%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1) + 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.