PRAENG.NS WACC - Weighted Average Cost of Capital

The WACC of Prajay Engineers Syndicate Ltd (PRAENG.NS) is 7.6%.

The Cost of Equity of Prajay Engineers Syndicate Ltd (PRAENG.NS) is 11.70%.

The Cost of Debt of Prajay Engineers Syndicate Ltd (PRAENG.NS) is 5.50%.

	Range	Selected
Cost of equity	10.30% - 13.10%	11.70%
Tax rate	13.50% - 20.90%	17.20%
Cost of debt	4.00% - 7.00%	5.50%
WACC	6.4% - 8.8%	7.6%

WACC

PRAENG.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.42	0.56

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.30%	13.10%

Tax rate	13.50%	20.90%
Debt/Equity ratio	1.3	1.3
Cost of debt	4.00%	7.00%

After-tax WACC	6.4%	8.8%


Selected WACC	7.6%

PRAENG.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 PRAENG.NS:

cost_of_equity (11.70%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.42) + 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.