PAEL.NS WACC - Weighted Average Cost of Capital
The WACC of Pae Ltd (PAEL.NS) is 7.5%.
| Range | Selected | |
| Cost of equity | 19.6% - 27.0% | 23.3% |
| Tax rate | 30.0% - 31.8% | 30.9% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 6.0% - 9.0% | 7.5% |
| Category | Low | High |
| Long-term bond rate | 7.5% | 8.0% |
| Equity market risk premium | 6.9% | 7.9% |
| Adjusted beta | 1.75 | 2.34 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 19.6% | 27.0% |
| Tax rate | 30.0% | 31.8% |
| Debt/Equity ratio | 4.29 | 4.29 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 6.0% | 9.0% |
| Selected WACC | 7.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| PAEL.NS | Pae Ltd | 4.29 | 1.18 | 0.3 |
| 514183.BO | Black Rose Industries Ltd | 0.02 | 0.85 | 0.84 |
| 516032.BO | Sarda Papers Ltd | 0.22 | 1.1 | 0.95 |
| 524480.BO | Riddhi Siddhi GluCo Biols Ltd | 0.18 | 0.95 | 0.85 |
| 533019.BO | Simplex Papers Ltd | 2.3 | -0.21 | -0.08 |
| 537326.BO | Chemtech Industrial Valves Ltd | 0.81 | 0.19 | 0.12 |
| 539800.BO | CHD CHEMICALS Ltd | 1.13 | -0.04 | -0.02 |
| 542524.BO | Ambassador Intra Holdings Ltd | 0.04 | 0.96 | 0.93 |
| ANIKINDS.NS | Anik Industries Ltd | 0.01 | 1.29 | 1.28 |
| REFEX.NS | Refex Industries Ltd | 0.05 | 1.49 | 1.44 |
| Low | High | |
| Unlevered beta | 0.62 | 0.88 |
| Relevered beta | 2.12 | 3 |
| Adjusted relevered beta | 1.75 | 2.34 |
PAEL.NS'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 PAEL.NS:
cost_of_equity (23.30%) = risk_free_rate (7.75%) + equity_risk_premium (7.40%) * adjusted_beta (1.75) + 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.