539113.BO WACC - Weighted Average Cost of Capital
The WACC of Paul Merchants Ltd (539113.BO) is 11.6%.
| Range | Selected | |
| Cost of equity | 11.0% - 13.2% | 12.1% |
| Tax rate | 24.7% - 25.8% | 25.25% |
| Cost of debt | 7.5% - 10.9% | 9.2% |
| WACC | 10.5% - 12.8% | 11.6% |
| Category | Low | High |
| Long-term bond rate | 6.9% | 7.4% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 0.49 | 0.58 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 11.0% | 13.2% |
| Tax rate | 24.7% | 25.8% |
| Debt/Equity ratio | 0.1 | 0.1 |
| Cost of debt | 7.5% | 10.9% |
| After-tax WACC | 10.5% | 12.8% |
| Selected WACC | 11.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 539113.BO | Paul Merchants Ltd | 0.1 | 1.35 | 1.26 |
| 508954.BO | Finkurve Financial Services Ltd | 0.16 | 0.15 | 0.13 |
| 511754.BO | Shalibhadra Finance Ltd | 0.09 | 0.35 | 0.33 |
| 532410.BO | Transcorp International Ltd | 0.28 | 0.44 | 0.36 |
| 532745.BO | Inditrade Capital Ltd | 9.85 | 0.65 | 0.08 |
| 535667.BO | India Finsec Ltd | 0.46 | -0.43 | -0.32 |
| INDOSTAR.NS | IndoStar Capital Finance Ltd | 1.63 | 1.6 | 0.72 |
| SATIN.NS | Satin Creditcare Network Ltd | 4.16 | 1.05 | 0.26 |
| SHRIRAMCIT.NS | Shriram City Union Finance Ltd | 1.89 | 1.38 | 0.57 |
| UJJIVAN.NS | Ujjivan Financial Services Ltd | 4.28 | 0.78 | 0.19 |
| Low | High | |
| Unlevered beta | 0.23 | 0.34 |
| Relevered beta | 0.24 | 0.37 |
| Adjusted relevered beta | 0.49 | 0.58 |
539113.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 539113.BO:
cost_of_equity (12.10%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.49) + 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.