PRESTIGE.NS WACC - Weighted Average Cost of Capital

The WACC of Prestige Estates Projects Ltd (PRESTIGE.NS) is 11.7%.

The Cost of Equity of Prestige Estates Projects Ltd (PRESTIGE.NS) is 12.30%.

The Cost of Debt of Prestige Estates Projects Ltd (PRESTIGE.NS) is 11.45%.

	Range	Selected
Cost of equity	10.50% - 14.10%	12.30%
Tax rate	21.80% - 23.80%	22.80%
Cost of debt	10.80% - 12.10%	11.45%
WACC	10.1% - 13.2%	11.7%

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	0.67

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.50%	14.10%

Tax rate	21.80%	23.80%
Debt/Equity ratio	0.22	0.22
Cost of debt	10.80%	12.10%

After-tax WACC	10.1%	13.2%


Selected WACC	11.7%

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 (12.30%) = 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.