MAXHEALTH.NS WACC - Weighted Average Cost of Capital

The WACC of Max Healthcare Institute Ltd (MAXHEALTH.NS) is 12.9%.

The Cost of Equity of Max Healthcare Institute Ltd (MAXHEALTH.NS) is 12.95%.

The Cost of Debt of Max Healthcare Institute Ltd (MAXHEALTH.NS) is 11.85%.

	Range	Selected
Cost of equity	11.50% - 14.40%	12.95%
Tax rate	12.40% - 19.90%	16.15%
Cost of debt	7.90% - 15.80%	11.85%
WACC	11.5% - 14.4%	12.9%

WACC

MAXHEALTH.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.56	0.7

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.50%	14.40%

Tax rate	12.40%	19.90%
Debt/Equity ratio	0.01	0.01
Cost of debt	7.90%	15.80%

After-tax WACC	11.5%	14.4%


Selected WACC	12.9%

MAXHEALTH.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 MAXHEALTH.NS:

cost_of_equity (12.95%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.56) + 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.