530589.BO WACC - Weighted Average Cost of Capital

The WACC of Prima Plastics Ltd (530589.BO) is 13.8%.

The Cost of Equity of Prima Plastics Ltd (530589.BO) is 15.60%.

The Cost of Debt of Prima Plastics Ltd (530589.BO) is 9.50%.

	Range	Selected
Cost of equity	13.40% - 17.80%	15.60%
Tax rate	14.60% - 15.20%	14.90%
Cost of debt	8.10% - 10.90%	9.50%
WACC	11.9% - 15.8%	13.8%

WACC

530589.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.78	1.07

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.40%	17.80%

Tax rate	14.60%	15.20%
Debt/Equity ratio	0.31	0.31
Cost of debt	8.10%	10.90%

After-tax WACC	11.9%	15.8%


Selected WACC	13.8%

530589.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 530589.BO:

cost_of_equity (15.60%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.78) + 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.