PUNJABCHEM.NS
Punjab Chemicals and Crop Protection Ltd
Price:  
1,210 
INR
Volume:  
9,322
India | Chemicals

PUNJABCHEM.NS WACC - Weighted Average Cost of Capital

The WACC of Punjab Chemicals and Crop Protection Ltd (PUNJABCHEM.NS) is 14.7%.

The Cost of Equity of Punjab Chemicals and Crop Protection Ltd (PUNJABCHEM.NS) is 15.1%.
The Cost of Debt of Punjab Chemicals and Crop Protection Ltd (PUNJABCHEM.NS) is 12.75%.

RangeSelected
Cost of equity13.5% - 16.7%15.1%
Tax rate27.1% - 27.9%27.5%
Cost of debt8.3% - 17.2%12.75%
WACC12.9% - 16.4%14.7%
WACC

PUNJABCHEM.NS WACC calculation

CategoryLowHigh
Long-term bond rate6.9%7.4%
Equity market risk premium8.3%9.3%
Adjusted beta0.80.95
Additional risk adjustments0.0%0.5%
Cost of equity13.5%16.7%
Tax rate27.1%27.9%
Debt/Equity ratio
0.080.08
Cost of debt8.3%17.2%
After-tax WACC12.9%16.4%
Selected WACC14.7%

PUNJABCHEM.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 PUNJABCHEM.NS:

cost_of_equity (15.10%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.8) + 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.