MANGCHEFER.NS WACC - Weighted Average Cost of Capital

The WACC of Mangalore Chemicals and Fertilisers Ltd (MANGCHEFER.NS) is 14.6%.

The Cost of Equity of Mangalore Chemicals and Fertilisers Ltd (MANGCHEFER.NS) is 17.60%.

The Cost of Debt of Mangalore Chemicals and Fertilisers Ltd (MANGCHEFER.NS) is 7.85%.

	Range	Selected
Cost of equity	14.70% - 20.50%	17.60%
Tax rate	32.90% - 35.10%	34.00%
Cost of debt	7.10% - 8.60%	7.85%
WACC	12.3% - 16.9%	14.6%

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	0.94	1.36

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.70%	20.50%

Tax rate	32.90%	35.10%
Debt/Equity ratio	0.32	0.32
Cost of debt	7.10%	8.60%

After-tax WACC	12.3%	16.9%


Selected WACC	14.6%

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 (17.60%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.94) + 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.