POWERMECH.NS WACC - Weighted Average Cost of Capital

The WACC of Power Mech Projects Ltd (POWERMECH.NS) is 16.9%.

The Cost of Equity of Power Mech Projects Ltd (POWERMECH.NS) is 17.20%.

The Cost of Debt of Power Mech Projects Ltd (POWERMECH.NS) is 12.30%.

	Range	Selected
Cost of equity	13.80% - 20.60%	17.20%
Tax rate	25.60% - 27.30%	26.45%
Cost of debt	7.90% - 16.70%	12.30%
WACC	13.5% - 20.3%	16.9%

WACC

POWERMECH.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.83	1.37

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.80%	20.60%

Tax rate	25.60%	27.30%
Debt/Equity ratio	0.04	0.04
Cost of debt	7.90%	16.70%

After-tax WACC	13.5%	20.3%


Selected WACC	16.9%

POWERMECH.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 POWERMECH.NS:

cost_of_equity (17.20%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.83) + 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.