JMFINANCIL.NS WACC - Weighted Average Cost of Capital

The WACC of JM Financial Ltd (JMFINANCIL.NS) is 14.1%.

The Cost of Equity of JM Financial Ltd (JMFINANCIL.NS) is 16.35%.

The Cost of Debt of JM Financial Ltd (JMFINANCIL.NS) is 15.30%.

	Range	Selected
Cost of equity	14.70% - 18.00%	16.35%
Tax rate	25.10% - 25.90%	25.50%
Cost of debt	6.70% - 23.90%	15.30%
WACC	10.4% - 17.9%	14.1%

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	0.94	1.09

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.70%	18.00%

Tax rate	25.10%	25.90%
Debt/Equity ratio	0.81	0.81
Cost of debt	6.70%	23.90%

After-tax WACC	10.4%	17.9%


Selected WACC	14.1%

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 (16.35%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.94) + 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.