PRECWIRE.NS WACC - Weighted Average Cost of Capital

The WACC of Precision Wires India Ltd (PRECWIRE.NS) is 19.5%.

The Cost of Equity of Precision Wires India Ltd (PRECWIRE.NS) is 18.15%.

The Cost of Debt of Precision Wires India Ltd (PRECWIRE.NS) is 70.95%.

	Range	Selected
Cost of equity	16.10% - 20.20%	18.15%
Tax rate	24.60% - 25.60%	25.10%
Cost of debt	8.60% - 133.30%	70.95%
WACC	15.8% - 23.3%	19.5%

WACC

PRECWIRE.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.12	1.32

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.10%	20.20%

Tax rate	24.60%	25.60%
Debt/Equity ratio	0.04	0.04
Cost of debt	8.60%	133.30%

After-tax WACC	15.8%	23.3%


Selected WACC	19.5%

PRECWIRE.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 PRECWIRE.NS:

cost_of_equity (18.15%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.12) + 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.