539113.BO WACC - Weighted Average Cost of Capital

The WACC of Paul Merchants Ltd (539113.BO) is 10.8%.

The Cost of Equity of Paul Merchants Ltd (539113.BO) is 14.40%.

The Cost of Debt of Paul Merchants Ltd (539113.BO) is 12.20%.

	Range	Selected
Cost of equity	12.70% - 16.10%	14.40%
Tax rate	25.30% - 25.70%	25.50%
Cost of debt	10.00% - 14.40%	12.20%
WACC	9.2% - 12.5%	10.8%

WACC

539113.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.7	0.89

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.70%	16.10%

Tax rate	25.30%	25.70%
Debt/Equity ratio	2.07	2.07
Cost of debt	10.00%	14.40%

After-tax WACC	9.2%	12.5%


Selected WACC	10.8%

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 (14.40%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.7) + 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.