PPAP.NS WACC - Weighted Average Cost of Capital

The WACC of PPAP Automotive Ltd (PPAP.NS) is 13.1%.

The Cost of Equity of PPAP Automotive Ltd (PPAP.NS) is 16.00%.

The Cost of Debt of PPAP Automotive Ltd (PPAP.NS) is 14.45%.

	Range	Selected
Cost of equity	14.50% - 17.50%	16.00%
Tax rate	29.50% - 45.80%	37.65%
Cost of debt	10.30% - 18.60%	14.45%
WACC	11.7% - 14.6%	13.1%

WACC

PPAP.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.92	1.03

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.50%	17.50%

Tax rate	29.50%	45.80%
Debt/Equity ratio	0.65	0.65
Cost of debt	10.30%	18.60%

After-tax WACC	11.7%	14.6%


Selected WACC	13.1%

PPAP.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 PPAP.NS:

cost_of_equity (16.00%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.92) + 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.