MAHICKRA.NS WACC - Weighted Average Cost of Capital

The WACC of Mahickra Chemicals Ltd (MAHICKRA.NS) is 14.3%.

The Cost of Equity of Mahickra Chemicals Ltd (MAHICKRA.NS) is 15.10%.

The Cost of Debt of Mahickra Chemicals Ltd (MAHICKRA.NS) is 9.35%.

	Range	Selected
Cost of equity	13.30% - 16.90%	15.10%
Tax rate	28.00% - 28.60%	28.30%
Cost of debt	8.30% - 10.40%	9.35%
WACC	12.6% - 16.0%	14.3%

WACC

MAHICKRA.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.77	0.97

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.30%	16.90%

Tax rate	28.00%	28.60%
Debt/Equity ratio	0.11	0.11
Cost of debt	8.30%	10.40%

After-tax WACC	12.6%	16.0%


Selected WACC	14.3%

MAHICKRA.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 MAHICKRA.NS:

cost_of_equity (15.10%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.77) + 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.