PANAMAPET.NS WACC - Weighted Average Cost of Capital

The WACC of Panama Petrochem Ltd (PANAMAPET.NS) is 22.1%.

The Cost of Equity of Panama Petrochem Ltd (PANAMAPET.NS) is 16.10%.

The Cost of Debt of Panama Petrochem Ltd (PANAMAPET.NS) is 518.25%.

	Range	Selected
Cost of equity	14.60% - 17.60%	16.10%
Tax rate	19.30% - 20.10%	19.70%
Cost of debt	7.50% - 1,029.00%	518.25%
WACC	14.4% - 29.8%	22.1%

WACC

PANAMAPET.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.93	1.04

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.60%	17.60%

Tax rate	19.30%	20.10%
Debt/Equity ratio	0.02	0.02
Cost of debt	7.50%	1,029.00%

After-tax WACC	14.4%	29.8%


Selected WACC	22.1%

PANAMAPET.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 PANAMAPET.NS:

cost_of_equity (16.10%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.93) + 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.