539359.BO WACC - Weighted Average Cost of Capital

The WACC of Pritika Auto Industries Ltd (539359.BO) is 12.7%.

The Cost of Equity of Pritika Auto Industries Ltd (539359.BO) is 14.80%.

The Cost of Debt of Pritika Auto Industries Ltd (539359.BO) is 11.50%.

	Range	Selected
Cost of equity	13.10% - 16.50%	14.80%
Tax rate	24.90% - 28.90%	26.90%
Cost of debt	9.80% - 13.20%	11.50%
WACC	11.2% - 14.2%	12.7%

WACC

539359.BO WACC calculation

Category	Low	High

Long-term bond rate	7.5%	8.0%
Equity market risk premium	6.9%	7.9%
Adjusted beta	0.8	1.01

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.10%	16.50%

Tax rate	24.90%	28.90%
Debt/Equity ratio	0.49	0.49
Cost of debt	9.80%	13.20%

After-tax WACC	11.2%	14.2%


Selected WACC	12.7%

539359.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 539359.BO:

cost_of_equity (14.80%) = risk_free_rate (7.75%) + equity_risk_premium (7.40%) * adjusted_beta (0.8) + 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.