MAZDOCK.NS WACC - Weighted Average Cost of Capital

The WACC of Mazagon Dock Shipbuilders Ltd (MAZDOCK.NS) is 15.7%.

The Cost of Equity of Mazagon Dock Shipbuilders Ltd (MAZDOCK.NS) is 15.50%.

The Cost of Debt of Mazagon Dock Shipbuilders Ltd (MAZDOCK.NS) is 991.90%.

	Range	Selected
Cost of equity	13.70% - 17.30%	15.50%
Tax rate	25.30% - 25.40%	25.35%
Cost of debt	7.50% - 1,976.30%	991.90%
WACC	13.7% - 17.6%	15.7%

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	0.82	1.02

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.70%	17.30%

Tax rate	25.30%	25.40%
Debt/Equity ratio	0	0
Cost of debt	7.50%	1,976.30%

After-tax WACC	13.7%	17.6%


Selected WACC	15.7%

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 (15.50%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.82) + 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.