MALUPAPER.NS WACC - Weighted Average Cost of Capital

The WACC of Malu Paper Mills Ltd (MALUPAPER.NS) is 16.1%.

The Cost of Equity of Malu Paper Mills Ltd (MALUPAPER.NS) is 22.95%.

The Cost of Debt of Malu Paper Mills Ltd (MALUPAPER.NS) is 17.80%.

	Range	Selected
Cost of equity	18.90% - 27.00%	22.95%
Tax rate	24.90% - 30.70%	27.80%
Cost of debt	8.70% - 26.90%	17.80%
WACC	10.8% - 21.5%	16.1%

WACC

MALUPAPER.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.45	2.06

Additional risk adjustments	0.0%	0.5%
Cost of equity	18.90%	27.00%

Tax rate	24.90%	30.70%
Debt/Equity ratio	1.93	1.93
Cost of debt	8.70%	26.90%

After-tax WACC	10.8%	21.5%


Selected WACC	16.1%

MALUPAPER.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 MALUPAPER.NS:

cost_of_equity (22.95%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.45) + 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.