JMFINANCIL.NS WACC - Weighted Average Cost of Capital

The WACC of JM Financial Ltd (JMFINANCIL.NS) is 13.0%.

The Cost of Equity of JM Financial Ltd (JMFINANCIL.NS) is 13.85%.

The Cost of Debt of JM Financial Ltd (JMFINANCIL.NS) is 16.45%.

	Range	Selected
Cost of equity	11.90% - 15.80%	13.85%
Tax rate	25.60% - 25.90%	25.75%
Cost of debt	9.00% - 23.90%	16.45%
WACC	9.4% - 16.7%	13.0%

WACC

JMFINANCIL.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.61	0.85

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.90%	15.80%

Tax rate	25.60%	25.90%
Debt/Equity ratio	0.93	0.93
Cost of debt	9.00%	23.90%

After-tax WACC	9.4%	16.7%


Selected WACC	13.0%

JMFINANCIL.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 JMFINANCIL.NS:

cost_of_equity (13.85%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.61) + 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.