PFOCUS.NS WACC - Weighted Average Cost of Capital

The WACC of Prime Focus Ltd (PFOCUS.NS) is 13.1%.

The Cost of Equity of Prime Focus Ltd (PFOCUS.NS) is 15.50%.

The Cost of Debt of Prime Focus Ltd (PFOCUS.NS) is 15.40%.

	Range	Selected
Cost of equity	13.60% - 17.40%	15.50%
Tax rate	30.00% - 30.00%	30.00%
Cost of debt	6.90% - 23.90%	15.40%
WACC	9.1% - 17.0%	13.1%

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	0.81	1.02

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.60%	17.40%

Tax rate	30.00%	30.00%
Debt/Equity ratio	1.03	1.03
Cost of debt	6.90%	23.90%

After-tax WACC	9.1%	17.0%


Selected WACC	13.1%

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 (15.50%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.81) + 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.