PKTEA.NS WACC - Weighted Average Cost of Capital

The WACC of Peria Karamalai Tea and Produce Company Ltd (PKTEA.NS) is 13.2%.

The Cost of Equity of Peria Karamalai Tea and Produce Company Ltd (PKTEA.NS) is 13.85%.

The Cost of Debt of Peria Karamalai Tea and Produce Company Ltd (PKTEA.NS) is 14.40%.

	Range	Selected
Cost of equity	12.70% - 15.00%	13.85%
Tax rate	30.00% - 30.00%	30.00%
Cost of debt	10.20% - 18.60%	14.40%
WACC	11.8% - 14.7%	13.2%

WACC

PKTEA.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.71	0.77

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.70%	15.00%

Tax rate	30.00%	30.00%
Debt/Equity ratio	0.21	0.21
Cost of debt	10.20%	18.60%

After-tax WACC	11.8%	14.7%


Selected WACC	13.2%

PKTEA.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 PKTEA.NS:

cost_of_equity (13.85%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.71) + 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.