PENTAGOLD.NS WACC - Weighted Average Cost of Capital

The WACC of Penta Gold Ltd (PENTAGOLD.NS) is 14.3%.

The Cost of Equity of Penta Gold Ltd (PENTAGOLD.NS) is 27.80%.

The Cost of Debt of Penta Gold Ltd (PENTAGOLD.NS) is 19.50%.

	Range	Selected
Cost of equity	23.70% - 31.90%	27.80%
Tax rate	34.00% - 35.20%	34.60%
Cost of debt	18.60% - 20.40%	19.50%
WACC	13.5% - 15.2%	14.3%

WACC

PENTAGOLD.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	2.03	2.58

Additional risk adjustments	0.0%	0.5%
Cost of equity	23.70%	31.90%

Tax rate	34.00%	35.20%
Debt/Equity ratio	8.4	8.4
Cost of debt	18.60%	20.40%

After-tax WACC	13.5%	15.2%


Selected WACC	14.3%

PENTAGOLD.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 PENTAGOLD.NS:

cost_of_equity (27.80%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (2.03) + 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.