PRIVISCL.NS WACC - Weighted Average Cost of Capital

The WACC of Privi Speciality Chemicals Ltd (PRIVISCL.NS) is 15.3%.

The Cost of Equity of Privi Speciality Chemicals Ltd (PRIVISCL.NS) is 16.40%.

The Cost of Debt of Privi Speciality Chemicals Ltd (PRIVISCL.NS) is 7.85%.

	Range	Selected
Cost of equity	14.50% - 18.30%	16.40%
Tax rate	26.40% - 26.60%	26.50%
Cost of debt	6.60% - 9.10%	7.85%
WACC	13.5% - 17.1%	15.3%

WACC

PRIVISCL.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.92	1.12

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.50%	18.30%

Tax rate	26.40%	26.60%
Debt/Equity ratio	0.11	0.11
Cost of debt	6.60%	9.10%

After-tax WACC	13.5%	17.1%


Selected WACC	15.3%

PRIVISCL.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 PRIVISCL.NS:

cost_of_equity (16.40%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.92) + 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.