531257.BO WACC - Weighted Average Cost of Capital

The WACC of Pratiksha Chemicals Ltd (531257.BO) is 10.7%.

The Cost of Equity of Pratiksha Chemicals Ltd (531257.BO) is 11.35%.

The Cost of Debt of Pratiksha Chemicals Ltd (531257.BO) is 10.45%.

	Range	Selected
Cost of equity	10.40% - 12.30%	11.35%
Tax rate	12.70% - 19.90%	16.30%
Cost of debt	7.00% - 13.90%	10.45%
WACC	9.4% - 12.0%	10.7%

WACC

531257.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.43	0.48

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.40%	12.30%

Tax rate	12.70%	19.90%
Debt/Equity ratio	0.3	0.3
Cost of debt	7.00%	13.90%

After-tax WACC	9.4%	12.0%


Selected WACC	10.7%

531257.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 531257.BO:

cost_of_equity (11.35%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.43) + 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.