PURVA.NS WACC - Weighted Average Cost of Capital

The WACC of Puravankara Ltd (PURVA.NS) is 13.0%.

The Cost of Equity of Puravankara Ltd (PURVA.NS) is 13.55%.

The Cost of Debt of Puravankara Ltd (PURVA.NS) is 19.15%.

	Range	Selected
Cost of equity	10.80% - 16.30%	13.55%
Tax rate	31.10% - 42.40%	36.75%
Cost of debt	14.40% - 23.90%	19.15%
WACC	10.5% - 15.5%	13.0%

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	0.47	0.9

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.80%	16.30%

Tax rate	31.10%	42.40%
Debt/Equity ratio	0.49	0.49
Cost of debt	14.40%	23.90%

After-tax WACC	10.5%	15.5%


Selected WACC	13.0%

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 (13.55%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.47) + 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.