MCDHOLDING.NS WACC - Weighted Average Cost of Capital

The WACC of McDowell Holdings Ltd (MCDHOLDING.NS) is 11.8%.

The Cost of Equity of McDowell Holdings Ltd (MCDHOLDING.NS) is 13.30%.

The Cost of Debt of McDowell Holdings Ltd (MCDHOLDING.NS) is 5.00%.

	Range	Selected
Cost of equity	10.70% - 15.90%	13.30%
Tax rate	0.30% - 10.40%	5.35%
Cost of debt	5.00% - 5.00%	5.00%
WACC	9.7% - 13.8%	11.8%

WACC

MCDHOLDING.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.46	0.87

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.70%	15.90%

Tax rate	0.30%	10.40%
Debt/Equity ratio	0.22	0.22
Cost of debt	5.00%	5.00%

After-tax WACC	9.7%	13.8%


Selected WACC	11.8%

MCDHOLDING.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 MCDHOLDING.NS:

cost_of_equity (13.30%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.46) + 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.