PSPPROJECT.NS WACC - Weighted Average Cost of Capital

The WACC of PSP Projects Ltd (PSPPROJECT.NS) is 16.0%.

The Cost of Equity of PSP Projects Ltd (PSPPROJECT.NS) is 17.25%.

The Cost of Debt of PSP Projects Ltd (PSPPROJECT.NS) is 12.15%.

	Range	Selected
Cost of equity	14.20% - 20.30%	17.25%
Tax rate	25.60% - 26.20%	25.90%
Cost of debt	8.60% - 15.70%	12.15%
WACC	13.0% - 19.0%	16.0%

WACC

PSPPROJECT.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.89	1.34

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.20%	20.30%

Tax rate	25.60%	26.20%
Debt/Equity ratio	0.18	0.18
Cost of debt	8.60%	15.70%

After-tax WACC	13.0%	19.0%


Selected WACC	16.0%

PSPPROJECT.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 PSPPROJECT.NS:

cost_of_equity (17.25%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.89) + 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.