MAZDOCK.NS WACC - Weighted Average Cost of Capital

The WACC of Mazagon Dock Shipbuilders Ltd (MAZDOCK.NS) is 16.0%.

The Cost of Equity of Mazagon Dock Shipbuilders Ltd (MAZDOCK.NS) is 16.00%.

The Cost of Debt of Mazagon Dock Shipbuilders Ltd (MAZDOCK.NS) is 60.80%.

	Range	Selected
Cost of equity	13.90% - 18.10%	16.00%
Tax rate	25.20% - 25.40%	25.30%
Cost of debt	7.50% - 114.10%	60.80%
WACC	13.9% - 18.1%	16.0%

WACC

MAZDOCK.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.84	1.1

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.90%	18.10%

Tax rate	25.20%	25.40%
Debt/Equity ratio	0	0
Cost of debt	7.50%	114.10%

After-tax WACC	13.9%	18.1%


Selected WACC	16.0%

MAZDOCK.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 MAZDOCK.NS:

cost_of_equity (16.00%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.84) + 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.