PURVA.NS WACC - Weighted Average Cost of Capital

The WACC of Puravankara Ltd (PURVA.NS) is 11.9%.

The Cost of Equity of Puravankara Ltd (PURVA.NS) is 13.65%.

The Cost of Debt of Puravankara Ltd (PURVA.NS) is 15.45%.

	Range	Selected
Cost of equity	11.00% - 16.30%	13.65%
Tax rate	37.90% - 42.40%	40.15%
Cost of debt	12.30% - 18.60%	15.45%
WACC	9.6% - 14.1%	11.9%

WACC

PURVA.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.49	0.9

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.00%	16.30%

Tax rate	37.90%	42.40%
Debt/Equity ratio	0.64	0.64
Cost of debt	12.30%	18.60%

After-tax WACC	9.6%	14.1%


Selected WACC	11.9%

PURVA.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 PURVA.NS:

cost_of_equity (13.65%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.49) + 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.