538891.BO WACC - Weighted Average Cost of Capital

The WACC of Magellanic Cloud Ltd (538891.BO) is 10.6%.

The Cost of Equity of Magellanic Cloud Ltd (538891.BO) is 10.85%.

The Cost of Debt of Magellanic Cloud Ltd (538891.BO) is 8.30%.

	Range	Selected
Cost of equity	9.90% - 11.80%	10.85%
Tax rate	22.80% - 25.10%	23.95%
Cost of debt	7.90% - 8.70%	8.30%
WACC	9.7% - 11.5%	10.6%

WACC

538891.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.37	0.43

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.90%	11.80%

Tax rate	22.80%	25.10%
Debt/Equity ratio	0.07	0.07
Cost of debt	7.90%	8.70%

After-tax WACC	9.7%	11.5%


Selected WACC	10.6%

538891.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 538891.BO:

cost_of_equity (10.85%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.37) + 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.