530589.BO
Prima Plastics Ltd
Price:  
149.00 
INR
Volume:  
1,884.00
India | Household Durables
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530589.BO WACC - Weighted Average Cost of Capital

The WACC of Prima Plastics Ltd (530589.BO) is 14.0%.

The Cost of Equity of Prima Plastics Ltd (530589.BO) is 15.70%.
The Cost of Debt of Prima Plastics Ltd (530589.BO) is 8.50%.

Range Selected
Cost of equity 14.20% - 17.20% 15.70%
Tax rate 15.40% - 16.60% 16.00%
Cost of debt 8.30% - 8.70% 8.50%
WACC 12.8% - 15.2% 14.0%
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 0.89 1
Additional risk adjustments 0.0% 0.5%
Cost of equity 14.20% 17.20%
Tax rate 15.40% 16.60%
Debt/Equity ratio 0.24 0.24
Cost of debt 8.30% 8.70%
After-tax WACC 12.8% 15.2%
Selected WACC 14.0%

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 (15.70%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.89) + 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.