POKARNA.NS WACC - Weighted Average Cost of Capital

The WACC of Pokarna Ltd (POKARNA.NS) is 13.3%.

The Cost of Equity of Pokarna Ltd (POKARNA.NS) is 14.30%.

The Cost of Debt of Pokarna Ltd (POKARNA.NS) is 8.25%.

	Range	Selected
Cost of equity	12.90% - 15.70%	14.30%
Tax rate	28.50% - 31.50%	30.00%
Cost of debt	7.90% - 8.60%	8.25%
WACC	12.1% - 14.6%	13.3%

WACC

POKARNA.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.73	0.85

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.90%	15.70%

Tax rate	28.50%	31.50%
Debt/Equity ratio	0.13	0.13
Cost of debt	7.90%	8.60%

After-tax WACC	12.1%	14.6%


Selected WACC	13.3%

POKARNA.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 POKARNA.NS:

cost_of_equity (14.30%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.73) + 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.