PRIMESECU.NS WACC - Weighted Average Cost of Capital

The WACC of Prime Securities Ltd (PRIMESECU.NS) is 13.2%.

The Cost of Equity of Prime Securities Ltd (PRIMESECU.NS) is 13.25%.

The Cost of Debt of Prime Securities Ltd (PRIMESECU.NS) is 7.30%.

	Range	Selected
Cost of equity	10.00% - 16.50%	13.25%
Tax rate	22.00% - 24.30%	23.15%
Cost of debt	7.10% - 7.50%	7.30%
WACC	10.0% - 16.5%	13.2%

WACC

PRIMESECU.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.37	0.93

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.00%	16.50%

Tax rate	22.00%	24.30%
Debt/Equity ratio	0	0
Cost of debt	7.10%	7.50%

After-tax WACC	10.0%	16.5%


Selected WACC	13.2%

PRIMESECU.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 PRIMESECU.NS:

cost_of_equity (13.25%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.37) + 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.