POWERMECH.NS
Power Mech Projects Ltd
Price:  
3,290 
INR
Volume:  
40,310
India | Construction & Engineering

POWERMECH.NS WACC - Weighted Average Cost of Capital

The WACC of Power Mech Projects Ltd (POWERMECH.NS) is 16.7%.

The Cost of Equity of Power Mech Projects Ltd (POWERMECH.NS) is 16.95%.
The Cost of Debt of Power Mech Projects Ltd (POWERMECH.NS) is 12.3%.

RangeSelected
Cost of equity13.7% - 20.2%16.95%
Tax rate25.6% - 27.3%26.45%
Cost of debt7.9% - 16.7%12.3%
WACC13.4% - 19.9%16.7%
WACC

POWERMECH.NS WACC calculation

CategoryLowHigh
Long-term bond rate6.9%7.4%
Equity market risk premium8.3%9.3%
Adjusted beta0.821.33
Additional risk adjustments0.0%0.5%
Cost of equity13.7%20.2%
Tax rate25.6%27.3%
Debt/Equity ratio
0.040.04
Cost of debt7.9%16.7%
After-tax WACC13.4%19.9%
Selected WACC16.7%

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 (16.95%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.82) + 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.