PDMJEPAPER.NS WACC - Weighted Average Cost of Capital

The WACC of Pudumjee Paper Products Ltd (PDMJEPAPER.NS) is 14.4%.

The Cost of Equity of Pudumjee Paper Products Ltd (PDMJEPAPER.NS) is 14.60%.

The Cost of Debt of Pudumjee Paper Products Ltd (PDMJEPAPER.NS) is 7.65%.

	Range	Selected
Cost of equity	12.70% - 16.50%	14.60%
Tax rate	25.20% - 25.40%	25.30%
Cost of debt	7.50% - 7.80%	7.65%
WACC	12.6% - 16.3%	14.4%

WACC

PDMJEPAPER.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.7	0.93

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.70%	16.50%

Tax rate	25.20%	25.40%
Debt/Equity ratio	0.02	0.02
Cost of debt	7.50%	7.80%

After-tax WACC	12.6%	16.3%


Selected WACC	14.4%

PDMJEPAPER.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 PDMJEPAPER.NS:

cost_of_equity (14.60%) = 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.