The WACC of Mahindra Lifespace Developers Ltd (MAHLIFE.NS) is 12.9%.
Range | Selected | |
Cost of equity | 10.9% - 15.6% | 13.25% |
Tax rate | 11.0% - 32.9% | 21.95% |
Cost of debt | 7.0% - 20.8% | 13.9% |
WACC | 10.5% - 15.4% | 12.9% |
Category | Low | High |
Long-term bond rate | 6.9% | 7.4% |
Equity market risk premium | 8.3% | 9.3% |
Adjusted beta | 0.49 | 0.83 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 10.9% | 15.6% |
Tax rate | 11.0% | 32.9% |
Debt/Equity ratio | 0.11 | 0.11 |
Cost of debt | 7.0% | 20.8% |
After-tax WACC | 10.5% | 15.4% |
Selected WACC | 12.9% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
MAHLIFE.NS | Mahindra Lifespace Developers Ltd | 0.11 | 1.67 | 1.52 |
504000.BO | Elpro International Ltd | 0.56 | 0.42 | 0.28 |
533078.BO | Manjeera Constructions Ltd | 6.61 | -0.05 | -0.01 |
ANSALHSG.NS | Ansal Housing Ltd | 14.36 | 1.65 | 0.12 |
ASHIANA.NS | Ashiana Housing Ltd | 0.04 | 0.56 | 0.54 |
DBREALTY.NS | D B Realty Ltd | 0.16 | 1.74 | 1.52 |
HDIL.NS | Housing Development and Infrastructure Ltd | 14.24 | 0.23 | 0.02 |
KOLTEPATIL.NS | Kolte-Patil Developers Ltd | 0.31 | 1.13 | 0.89 |
OMAXE.NS | Omaxe Ltd | 0.41 | 2.01 | 1.48 |
PARSVNATH.NS | Parsvnath Developers Ltd | 3.23 | 0.24 | 0.06 |
Low | High | |
Unlevered beta | 0.22 | 0.68 |
Relevered beta | 0.24 | 0.75 |
Adjusted relevered beta | 0.49 | 0.83 |
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 MAHLIFE.NS:
cost_of_equity (13.25%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.49) + 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.