MAHLOG.NS WACC - Weighted Average Cost of Capital

The WACC of Mahindra Logistics Ltd (MAHLOG.NS) is 16.1%.

The Cost of Equity of Mahindra Logistics Ltd (MAHLOG.NS) is 18.25%.

The Cost of Debt of Mahindra Logistics Ltd (MAHLOG.NS) is 11.30%.

	Range	Selected
Cost of equity	16.50% - 20.00%	18.25%
Tax rate	30.00% - 30.00%	30.00%
Cost of debt	4.00% - 18.60%	11.30%
WACC	13.6% - 18.6%	16.1%

WACC

MAHLOG.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.16	1.31

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.50%	20.00%

Tax rate	30.00%	30.00%
Debt/Equity ratio	0.27	0.27
Cost of debt	4.00%	18.60%

After-tax WACC	13.6%	18.6%


Selected WACC	16.1%

MAHLOG.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 MAHLOG.NS:

cost_of_equity (18.25%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.16) + 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.