PMA.WA WACC - Weighted Average Cost of Capital

The WACC of Prima Moda SA (PMA.WA) is 8.0%.

The Cost of Equity of Prima Moda SA (PMA.WA) is 16.60%.

The Cost of Debt of Prima Moda SA (PMA.WA) is 6.05%.

	Range	Selected
Cost of equity	12.80% - 20.40%	16.60%
Tax rate	4.60% - 5.40%	5.00%
Cost of debt	5.10% - 7.00%	6.05%
WACC	6.6% - 9.5%	8.0%

WACC

PMA.WA WACC calculation

Category	Low	High

Long-term bond rate	5.5%	6.0%
Equity market risk premium	6.3%	7.3%
Adjusted beta	1.16	1.89

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.80%	20.40%

Tax rate	4.60%	5.40%
Debt/Equity ratio	3.75	3.75
Cost of debt	5.10%	7.00%

After-tax WACC	6.6%	9.5%


Selected WACC	8.0%

PMA.WA'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 PMA.WA:

cost_of_equity (16.60%) = risk_free_rate (5.75%) + equity_risk_premium (6.80%) * adjusted_beta (1.16) + 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.