MCDOWELL-N.NS WACC - Weighted Average Cost of Capital
The WACC of United Spirits Ltd (MCDOWELL-N.NS) is 15.4%.
| Range | Selected | |
| Cost of equity | 13.3% - 17.6% | 15.45% |
| Tax rate | 21.7% - 24.4% | 23.05% |
| Cost of debt | 7.8% - 8.7% | 8.25% |
| WACC | 13.3% - 17.6% | 15.4% |
| Category | Low | High |
| Long-term bond rate | 7.1% | 7.6% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 0.75 | 1.02 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 13.3% | 17.6% |
| Tax rate | 21.7% | 24.4% |
| Debt/Equity ratio | 0 | 0 |
| Cost of debt | 7.8% | 8.7% |
| After-tax WACC | 13.3% | 17.6% |
| Selected WACC | 15.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| MCDOWELL-N.NS | United Spirits Ltd | 0 | 0.77 | 0.77 |
| 000080.KS | HiteJinro Co Ltd | 0.79 | 0.39 | 0.24 |
| 2531.T | Takara Holdings Inc | 0.22 | 0.23 | 0.19 |
| ASALCBR.NS | Associated Alcohols & Breweries Ltd | 0.05 | 2.16 | 2.08 |
| BELU.ME | Beluga Group PAO | 0.38 | -0.06 | -0.05 |
| GLOBUSSPR.NS | Globus Spirits Ltd | 0.1 | 2 | 1.85 |
| IFBAGRO.NS | IFB Agro Industries Ltd | 0.02 | 1.34 | 1.32 |
| RADICO.NS | Radico Khaitan Ltd | 0.02 | 0.9 | 0.89 |
| TI.NS | Tilaknagar Industries Ltd | 0.02 | 1.86 | 1.84 |
| TWE.AX | Treasury Wine Estates Ltd | 0.31 | 1.17 | 0.95 |
| Low | High | |
| Unlevered beta | 0.84 | 1.1 |
| Relevered beta | 0.63 | 1.03 |
| Adjusted relevered beta | 0.75 | 1.02 |
MCDOWELL-N.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 MCDOWELL-N.NS:
cost_of_equity (15.45%) = risk_free_rate (7.35%) + equity_risk_premium (8.80%) * adjusted_beta (0.75) + 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.