MAHASTEEL.NS WACC - Weighted Average Cost of Capital

The WACC of Mahamaya Steel Industries Ltd (MAHASTEEL.NS) is 13.1%.

The Cost of Equity of Mahamaya Steel Industries Ltd (MAHASTEEL.NS) is 13.25%.

The Cost of Debt of Mahamaya Steel Industries Ltd (MAHASTEEL.NS) is 8.65%.

	Range	Selected
Cost of equity	11.60% - 14.90%	13.25%
Tax rate	24.90% - 25.80%	25.35%
Cost of debt	8.60% - 8.70%	8.65%
WACC	11.5% - 14.6%	13.1%

WACC

MAHASTEEL.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.57	0.75

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.60%	14.90%

Tax rate	24.90%	25.80%
Debt/Equity ratio	0.03	0.03
Cost of debt	8.60%	8.70%

After-tax WACC	11.5%	14.6%


Selected WACC	13.1%

MAHASTEEL.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 MAHASTEEL.NS:

cost_of_equity (13.25%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.57) + 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.