MAGNUM.NS WACC - Weighted Average Cost of Capital

The WACC of Magnum Ventures Ltd (MAGNUM.NS) is 10.7%.

The Cost of Equity of Magnum Ventures Ltd (MAGNUM.NS) is 16.75%.

The Cost of Debt of Magnum Ventures Ltd (MAGNUM.NS) is 8.50%.

	Range	Selected
Cost of equity	14.30% - 19.20%	16.75%
Tax rate	30.00% - 30.00%	30.00%
Cost of debt	4.90% - 12.10%	8.50%
WACC	8.2% - 13.2%	10.7%

WACC

MAGNUM.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.89	1.22

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.30%	19.20%

Tax rate	30.00%	30.00%
Debt/Equity ratio	1.29	1.29
Cost of debt	4.90%	12.10%

After-tax WACC	8.2%	13.2%


Selected WACC	10.7%

MAGNUM.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 MAGNUM.NS:

cost_of_equity (16.75%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.89) + 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.