MALUPAPER.NS WACC - Weighted Average Cost of Capital

The WACC of Malu Paper Mills Ltd (MALUPAPER.NS) is 10.4%.

The Cost of Equity of Malu Paper Mills Ltd (MALUPAPER.NS) is 24.10%.

The Cost of Debt of Malu Paper Mills Ltd (MALUPAPER.NS) is 7.75%.

	Range	Selected
Cost of equity	18.30% - 29.90%	24.10%
Tax rate	24.90% - 26.80%	25.85%
Cost of debt	7.00% - 8.50%	7.75%
WACC	8.5% - 12.2%	10.4%

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	1.38	2.37

Additional risk adjustments	0.0%	0.5%
Cost of equity	18.30%	29.90%

Tax rate	24.90%	26.80%
Debt/Equity ratio	2.99	2.99
Cost of debt	7.00%	8.50%

After-tax WACC	8.5%	12.2%


Selected WACC	10.4%

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 (24.10%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.38) + 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.