531437.BO WACC - Weighted Average Cost of Capital

The WACC of Prakash Woollen & Synthetic Mills Ltd (531437.BO) is 8.5%.

The Cost of Equity of Prakash Woollen & Synthetic Mills Ltd (531437.BO) is 12.15%.

The Cost of Debt of Prakash Woollen & Synthetic Mills Ltd (531437.BO) is 8.55%.

	Range	Selected
Cost of equity	10.70% - 13.60%	12.15%
Tax rate	19.60% - 37.40%	28.50%
Cost of debt	7.00% - 10.10%	8.55%
WACC	7.7% - 9.3%	8.5%

WACC

531437.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.46	0.61

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.70%	13.60%

Tax rate	19.60%	37.40%
Debt/Equity ratio	1.44	1.44
Cost of debt	7.00%	10.10%

After-tax WACC	7.7%	9.3%


Selected WACC	8.5%

531437.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 531437.BO:

cost_of_equity (12.15%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.46) + 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.