MANGCHEFER.NS WACC - Weighted Average Cost of Capital

The WACC of Mangalore Chemicals and Fertilisers Ltd (MANGCHEFER.NS) is 13.5%.

The Cost of Equity of Mangalore Chemicals and Fertilisers Ltd (MANGCHEFER.NS) is 16.45%.

The Cost of Debt of Mangalore Chemicals and Fertilisers Ltd (MANGCHEFER.NS) is 8.35%.

	Range	Selected
Cost of equity	13.50% - 19.40%	16.45%
Tax rate	30.20% - 35.10%	32.65%
Cost of debt	6.70% - 10.00%	8.35%
WACC	11.1% - 15.9%	13.5%

WACC

MANGCHEFER.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.8	1.24

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.50%	19.40%

Tax rate	30.20%	35.10%
Debt/Equity ratio	0.37	0.37
Cost of debt	6.70%	10.00%

After-tax WACC	11.1%	15.9%


Selected WACC	13.5%

MANGCHEFER.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 MANGCHEFER.NS:

cost_of_equity (16.45%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.8) + 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.