530589.BO WACC - Weighted Average Cost of Capital

The WACC of Prima Plastics Ltd (530589.BO) is 13.1%.

The Cost of Equity of Prima Plastics Ltd (530589.BO) is 15.20%.

The Cost of Debt of Prima Plastics Ltd (530589.BO) is 8.40%.

	Range	Selected
Cost of equity	13.60% - 16.80%	15.20%
Tax rate	15.40% - 16.60%	16.00%
Cost of debt	8.10% - 8.70%	8.40%
WACC	11.9% - 14.4%	13.1%

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	0.81	0.96

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.60%	16.80%

Tax rate	15.40%	16.60%
Debt/Equity ratio	0.34	0.34
Cost of debt	8.10%	8.70%

After-tax WACC	11.9%	14.4%


Selected WACC	13.1%

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 (15.20%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.81) + 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.