PRESTIGE.NS WACC - Weighted Average Cost of Capital

The WACC of Prestige Estates Projects Ltd (PRESTIGE.NS) is 11.1%.

The Cost of Equity of Prestige Estates Projects Ltd (PRESTIGE.NS) is 11.85%.

The Cost of Debt of Prestige Estates Projects Ltd (PRESTIGE.NS) is 10.25%.

	Range	Selected
Cost of equity	10.50% - 13.20%	11.85%
Tax rate	19.10% - 21.00%	20.05%
Cost of debt	10.00% - 10.50%	10.25%
WACC	10.0% - 12.2%	11.1%

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	0.44	0.58

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.50%	13.20%

Tax rate	19.10%	21.00%
Debt/Equity ratio	0.26	0.26
Cost of debt	10.00%	10.50%

After-tax WACC	10.0%	12.2%


Selected WACC	11.1%

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 (11.85%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.44) + 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.