PGHH.NS WACC - Weighted Average Cost of Capital

The WACC of Procter & Gamble Hygiene and Health Care Ltd (PGHH.NS) is 12.8%.

The Cost of Equity of Procter & Gamble Hygiene and Health Care Ltd (PGHH.NS) is 12.80%.

The Cost of Debt of Procter & Gamble Hygiene and Health Care Ltd (PGHH.NS) is 27.40%.

	Range	Selected
Cost of equity	11.10% - 14.50%	12.80%
Tax rate	26.30% - 26.50%	26.40%
Cost of debt	7.50% - 47.30%	27.40%
WACC	11.1% - 14.5%	12.8%

WACC

PGHH.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.5	0.71

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.10%	14.50%

Tax rate	26.30%	26.50%
Debt/Equity ratio	0	0
Cost of debt	7.50%	47.30%

After-tax WACC	11.1%	14.5%


Selected WACC	12.8%

PGHH.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 PGHH.NS:

cost_of_equity (12.80%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.5) + 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.