530341.BO WACC - Weighted Average Cost of Capital

The WACC of Mukesh Babu Financial Services Ltd (530341.BO) is 14.0%.

The Cost of Equity of Mukesh Babu Financial Services Ltd (530341.BO) is 15.35%.

The Cost of Debt of Mukesh Babu Financial Services Ltd (530341.BO) is 13.95%.

	Range	Selected
Cost of equity	11.90% - 18.80%	15.35%
Tax rate	25.90% - 28.40%	27.15%
Cost of debt	4.00% - 23.90%	13.95%
WACC	9.6% - 18.4%	14.0%

WACC

530341.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.6	1.18

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.90%	18.80%

Tax rate	25.90%	28.40%
Debt/Equity ratio	0.33	0.33
Cost of debt	4.00%	23.90%

After-tax WACC	9.6%	18.4%


Selected WACC	14.0%

530341.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 530341.BO:

cost_of_equity (15.35%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * 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.