MANGALAM.NS WACC - Weighted Average Cost of Capital

The WACC of Mangalam Drugs and Organics Ltd (MANGALAM.NS) is 18.3%.

The Cost of Equity of Mangalam Drugs and Organics Ltd (MANGALAM.NS) is 23.65%.

The Cost of Debt of Mangalam Drugs and Organics Ltd (MANGALAM.NS) is 17.25%.

	Range	Selected
Cost of equity	20.20% - 27.10%	23.65%
Tax rate	29.20% - 30.30%	29.75%
Cost of debt	15.90% - 18.60%	17.25%
WACC	16.0% - 20.5%	18.3%

WACC

MANGALAM.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.6	2.06

Additional risk adjustments	0.0%	0.5%
Cost of equity	20.20%	27.10%

Tax rate	29.20%	30.30%
Debt/Equity ratio	0.87	0.87
Cost of debt	15.90%	18.60%

After-tax WACC	16.0%	20.5%


Selected WACC	18.3%

MANGALAM.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 MANGALAM.NS:

cost_of_equity (23.65%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.6) + 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.