MEGH.NS WACC - Weighted Average Cost of Capital

The WACC of Meghmani Organics Ltd (MEGH.NS) is 15.6%.

The Cost of Equity of Meghmani Organics Ltd (MEGH.NS) is 16.30%.

The Cost of Debt of Meghmani Organics Ltd (MEGH.NS) is 8.10%.

	Range	Selected
Cost of equity	14.90% - 17.70%	16.30%
Tax rate	25.70% - 26.30%	26.00%
Cost of debt	8.00% - 8.20%	8.10%
WACC	14.3% - 16.9%	15.6%

WACC

MEGH.NS WACC calculation

Category	Low	High

Long-term bond rate	7.5%	8.0%
Equity market risk premium	6.9%	7.9%
Adjusted beta	1.07	1.16

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.90%	17.70%

Tax rate	25.70%	26.30%
Debt/Equity ratio	0.08	0.08
Cost of debt	8.00%	8.20%

After-tax WACC	14.3%	16.9%


Selected WACC	15.6%

MEGH.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 MEGH.NS:

cost_of_equity (16.30%) = risk_free_rate (7.75%) + equity_risk_premium (7.40%) * adjusted_beta (1.07) + 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.