PRESTIGE.NS WACC - Weighted Average Cost of Capital

The WACC of Prestige Estates Projects Ltd (PRESTIGE.NS) is 12.2%.

The Cost of Equity of Prestige Estates Projects Ltd (PRESTIGE.NS) is 12.65%.

The Cost of Debt of Prestige Estates Projects Ltd (PRESTIGE.NS) is 12.10%.

	Range	Selected
Cost of equity	10.40% - 14.90%	12.65%
Tax rate	19.10% - 21.00%	20.05%
Cost of debt	12.10% - 12.10%	12.10%
WACC	10.3% - 14.1%	12.2%

WACC

PRESTIGE.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.43	0.75

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.40%	14.90%

Tax rate	19.10%	21.00%
Debt/Equity ratio	0.18	0.18
Cost of debt	12.10%	12.10%

After-tax WACC	10.3%	14.1%


Selected WACC	12.2%

PRESTIGE.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 PRESTIGE.NS:

cost_of_equity (12.65%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.43) + 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.