PERSISTENT.NS WACC - Weighted Average Cost of Capital

The WACC of Persistent Systems Ltd (PERSISTENT.NS) is 12.6%.

The Cost of Equity of Persistent Systems Ltd (PERSISTENT.NS) is 12.65%.

The Cost of Debt of Persistent Systems Ltd (PERSISTENT.NS) is 9.20%.

	Range	Selected
Cost of equity	10.00% - 15.30%	12.65%
Tax rate	25.10% - 25.50%	25.30%
Cost of debt	7.50% - 10.90%	9.20%
WACC	9.9% - 15.2%	12.6%

WACC

PERSISTENT.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.37	0.8

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.00%	15.30%

Tax rate	25.10%	25.50%
Debt/Equity ratio	0.01	0.01
Cost of debt	7.50%	10.90%

After-tax WACC	9.9%	15.2%


Selected WACC	12.6%

PERSISTENT.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 PERSISTENT.NS:

cost_of_equity (12.65%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.37) + 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.