531727.BO WACC - Weighted Average Cost of Capital

The WACC of Menon Pistons Ltd (531727.BO) is 15.1%.

The Cost of Equity of Menon Pistons Ltd (531727.BO) is 15.55%.

The Cost of Debt of Menon Pistons Ltd (531727.BO) is 11.25%.

	Range	Selected
Cost of equity	14.20% - 16.90%	15.55%
Tax rate	25.50% - 27.10%	26.30%
Cost of debt	7.60% - 14.90%	11.25%
WACC	13.7% - 16.5%	15.1%

WACC

531727.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.88	0.97

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.20%	16.90%

Tax rate	25.50%	27.10%
Debt/Equity ratio	0.07	0.07
Cost of debt	7.60%	14.90%

After-tax WACC	13.7%	16.5%


Selected WACC	15.1%

531727.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 531727.BO:

cost_of_equity (15.55%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.88) + 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.