PERSISTENT.NS WACC - Weighted Average Cost of Capital

The WACC of Persistent Systems Ltd (PERSISTENT.NS) is 12.1%.

The Cost of Equity of Persistent Systems Ltd (PERSISTENT.NS) is 12.10%.

The Cost of Debt of Persistent Systems Ltd (PERSISTENT.NS) is 9.60%.

	Range	Selected
Cost of equity	9.80% - 14.40%	12.10%
Tax rate	23.90% - 24.80%	24.35%
Cost of debt	7.50% - 11.70%	9.60%
WACC	9.8% - 14.4%	12.1%

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	0.36	0.7

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.80%	14.40%

Tax rate	23.90%	24.80%
Debt/Equity ratio	0.01	0.01
Cost of debt	7.50%	11.70%

After-tax WACC	9.8%	14.4%


Selected WACC	12.1%

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 (12.10%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.36) + 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.