MALUPAPER.NS WACC - Weighted Average Cost of Capital

The WACC of Malu Paper Mills Ltd (MALUPAPER.NS) is 11.6%.

The Cost of Equity of Malu Paper Mills Ltd (MALUPAPER.NS) is 23.40%.

The Cost of Debt of Malu Paper Mills Ltd (MALUPAPER.NS) is 7.85%.

	Range	Selected
Cost of equity	19.40% - 27.40%	23.40%
Tax rate	24.90% - 26.80%	25.85%
Cost of debt	7.00% - 8.70%	7.85%
WACC	9.9% - 13.3%	11.6%

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	1.51	2.09

Additional risk adjustments	0.0%	0.5%
Cost of equity	19.40%	27.40%

Tax rate	24.90%	26.80%
Debt/Equity ratio	2.03	2.03
Cost of debt	7.00%	8.70%

After-tax WACC	9.9%	13.3%


Selected WACC	11.6%

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 (23.40%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.51) + 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.