PRECWIRE.NS WACC - Weighted Average Cost of Capital

The WACC of Precision Wires India Ltd (PRECWIRE.NS) is 18.5%.

The Cost of Equity of Precision Wires India Ltd (PRECWIRE.NS) is 17.90%.

The Cost of Debt of Precision Wires India Ltd (PRECWIRE.NS) is 70.80%.

	Range	Selected
Cost of equity	15.90% - 19.90%	17.90%
Tax rate	25.20% - 25.60%	25.40%
Cost of debt	8.60% - 133.00%	70.80%
WACC	15.7% - 21.3%	18.5%

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	1.09	1.29

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.90%	19.90%

Tax rate	25.20%	25.60%
Debt/Equity ratio	0.02	0.02
Cost of debt	8.60%	133.00%

After-tax WACC	15.7%	21.3%


Selected WACC	18.5%

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 (17.90%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.09) + 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.