PFOCUS.NS WACC - Weighted Average Cost of Capital

The WACC of Prime Focus Ltd (PFOCUS.NS) is 11.6%.

The Cost of Equity of Prime Focus Ltd (PFOCUS.NS) is 12.15%.

The Cost of Debt of Prime Focus Ltd (PFOCUS.NS) is 12.15%.

	Range	Selected
Cost of equity	10.60% - 13.70%	12.15%
Tax rate	14.70% - 24.60%	19.65%
Cost of debt	8.90% - 15.40%	12.15%
WACC	10.0% - 13.3%	11.6%

WACC

PFOCUS.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.45	0.63

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.60%	13.70%

Tax rate	14.70%	24.60%
Debt/Equity ratio	0.27	0.27
Cost of debt	8.90%	15.40%

After-tax WACC	10.0%	13.3%


Selected WACC	11.6%

PFOCUS.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 PFOCUS.NS:

cost_of_equity (12.15%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.45) + 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.