PVR.NS WACC - Weighted Average Cost of Capital

The WACC of PVR Ltd (PVR.NS) is 11.3%.

The Cost of Equity of PVR Ltd (PVR.NS) is 13.30%.

The Cost of Debt of PVR Ltd (PVR.NS) is 9.15%.

	Range	Selected
Cost of equity	11.60% - 15.00%	13.30%
Tax rate	32.10% - 35.20%	33.65%
Cost of debt	6.80% - 11.50%	9.15%
WACC	9.7% - 12.9%	11.3%

WACC

PVR.NS WACC calculation

Category	Low	High

Long-term bond rate	7.4%	7.9%
Equity market risk premium	6.9%	7.9%
Adjusted beta	0.6	0.83

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.60%	15.00%

Tax rate	32.10%	35.20%
Debt/Equity ratio	0.39	0.39
Cost of debt	6.80%	11.50%

After-tax WACC	9.7%	12.9%


Selected WACC	11.3%

PVR.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 PVR.NS:

cost_of_equity (13.30%) = risk_free_rate (7.65%) + equity_risk_premium (7.40%) * adjusted_beta (0.6) + 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.