523483.BO WACC - Weighted Average Cost of Capital

The WACC of Pacific Industries Ltd (523483.BO) is 13.5%.

The Cost of Equity of Pacific Industries Ltd (523483.BO) is 18.10%.

The Cost of Debt of Pacific Industries Ltd (523483.BO) is 9.50%.

	Range	Selected
Cost of equity	16.10% - 20.10%	18.10%
Tax rate	20.60% - 22.80%	21.70%
Cost of debt	6.90% - 12.10%	9.50%
WACC	11.6% - 15.5%	13.5%

WACC

523483.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.11	1.32

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.10%	20.10%

Tax rate	20.60%	22.80%
Debt/Equity ratio	0.75	0.75
Cost of debt	6.90%	12.10%

After-tax WACC	11.6%	15.5%


Selected WACC	13.5%

523483.BO'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 523483.BO:

cost_of_equity (18.10%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.11) + 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.