The WACC of Madhucon Projects Ltd (MADHUCON.NS) is 4.1%.
| Range | Selected | |
| Cost of equity | 22.00% - 57.10% | 39.55% |
| Tax rate | 6.50% - 11.80% | 9.15% |
| Cost of debt | 4.00% - 4.50% | 4.25% |
| WACC | 3.9% - 4.4% | 4.1% |
| Category | Low | High |
| Long-term bond rate | 6.9% | 7.4% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 1.83 | 5.29 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 22.00% | 57.10% |
| Tax rate | 6.50% | 11.80% |
| Debt/Equity ratio | 135.83 | 135.83 |
| Cost of debt | 4.00% | 4.50% |
| After-tax WACC | 3.9% | 4.4% |
| Selected WACC | 4.1% | |
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 MADHUCON.NS:
cost_of_equity (39.55%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.83) + 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.