PNBGILTS.NS WACC - Weighted Average Cost of Capital

The WACC of Pnb Gilts Ltd (PNBGILTS.NS) is 14.3%.

The Cost of Equity of Pnb Gilts Ltd (PNBGILTS.NS) is 45.60%.

The Cost of Debt of Pnb Gilts Ltd (PNBGILTS.NS) is 16.25%.

	Range	Selected
Cost of equity	31.40% - 59.80%	45.60%
Tax rate	23.70% - 25.70%	24.70%
Cost of debt	5.60% - 26.90%	16.25%
WACC	6.1% - 22.6%	14.3%

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	2.95	5.58

Additional risk adjustments	0.0%	0.5%
Cost of equity	31.40%	59.80%

Tax rate	23.70%	25.70%
Debt/Equity ratio	14.08	14.08
Cost of debt	5.60%	26.90%

After-tax WACC	6.1%	22.6%


Selected WACC	14.3%

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 (45.60%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (2.95) + 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.