PNBGILTS.NS WACC - Weighted Average Cost of Capital

The WACC of Pnb Gilts Ltd (PNBGILTS.NS) is 14.7%.

The Cost of Equity of Pnb Gilts Ltd (PNBGILTS.NS) is 44.55%.

The Cost of Debt of Pnb Gilts Ltd (PNBGILTS.NS) is 16.60%.

	Range	Selected
Cost of equity	33.90% - 55.20%	44.55%
Tax rate	23.50% - 25.50%	24.50%
Cost of debt	6.30% - 26.90%	16.60%
WACC	6.9% - 22.5%	14.7%

WACC

PNBGILTS.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	3.25	5.09

Additional risk adjustments	0.0%	0.5%
Cost of equity	33.90%	55.20%

Tax rate	23.50%	25.50%
Debt/Equity ratio	13.11	13.11
Cost of debt	6.30%	26.90%

After-tax WACC	6.9%	22.5%


Selected WACC	14.7%

PNBGILTS.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 PNBGILTS.NS:

cost_of_equity (44.55%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (3.25) + 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.