PENIND.NS WACC - Weighted Average Cost of Capital

The WACC of Pennar Industries Ltd (PENIND.NS) is 15.7%.

The Cost of Equity of Pennar Industries Ltd (PENIND.NS) is 18.15%.

The Cost of Debt of Pennar Industries Ltd (PENIND.NS) is 12.30%.

	Range	Selected
Cost of equity	16.70% - 19.60%	18.15%
Tax rate	24.10% - 24.80%	24.45%
Cost of debt	10.50% - 14.10%	12.30%
WACC	14.3% - 17.1%	15.7%

WACC

PENIND.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.19	1.26

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.70%	19.60%

Tax rate	24.10%	24.80%
Debt/Equity ratio	0.38	0.38
Cost of debt	10.50%	14.10%

After-tax WACC	14.3%	17.1%


Selected WACC	15.7%

PENIND.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 PENIND.NS:

cost_of_equity (18.15%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.19) + 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.