532626.BO WACC - Weighted Average Cost of Capital

The WACC of Pondy Oxides and Chemicals Ltd (532626.BO) is 15.7%.

The Cost of Equity of Pondy Oxides and Chemicals Ltd (532626.BO) is 18.55%.

The Cost of Debt of Pondy Oxides and Chemicals Ltd (532626.BO) is 7.70%.

	Range	Selected
Cost of equity	16.20% - 20.90%	18.55%
Tax rate	24.20% - 28.50%	26.35%
Cost of debt	7.10% - 8.30%	7.70%
WACC	13.9% - 17.6%	15.7%

WACC

532626.BO WACC calculation

Category	Low	High

Long-term bond rate	7.4%	7.9%
Equity market risk premium	6.9%	7.9%
Adjusted beta	1.27	1.57

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.20%	20.90%

Tax rate	24.20%	28.50%
Debt/Equity ratio	0.28	0.28
Cost of debt	7.10%	8.30%

After-tax WACC	13.9%	17.6%


Selected WACC	15.7%

532626.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 532626.BO:

cost_of_equity (18.55%) = risk_free_rate (7.65%) + equity_risk_premium (7.40%) * adjusted_beta (1.27) + 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.