MENONBE.NS WACC - Weighted Average Cost of Capital

The WACC of Menon Bearings Ltd (MENONBE.NS) is 15.6%.

The Cost of Equity of Menon Bearings Ltd (MENONBE.NS) is 15.95%.

The Cost of Debt of Menon Bearings Ltd (MENONBE.NS) is 10.50%.

	Range	Selected
Cost of equity	14.60% - 17.30%	15.95%
Tax rate	24.30% - 25.30%	24.80%
Cost of debt	7.80% - 13.20%	10.50%
WACC	14.2% - 17.0%	15.6%

WACC

MENONBE.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.93	1.02

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.60%	17.30%

Tax rate	24.30%	25.30%
Debt/Equity ratio	0.05	0.05
Cost of debt	7.80%	13.20%

After-tax WACC	14.2%	17.0%


Selected WACC	15.6%

MENONBE.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 MENONBE.NS:

cost_of_equity (15.95%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.93) + 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.