MGL.NS
Mahanagar Gas Ltd
Price:  
1,359.50 
INR
Volume:  
683,250.00
India | Gas Utilities
Valuation
Overview
Financials
Forecast
Compare
Historical Price
SolvencyDividends
Transactions
People

MGL.NS WACC - Weighted Average Cost of Capital

The WACC of Mahanagar Gas Ltd (MGL.NS) is 14.5%.

The Cost of Equity of Mahanagar Gas Ltd (MGL.NS) is 14.65%.
The Cost of Debt of Mahanagar Gas Ltd (MGL.NS) is 5.75%.

Range Selected
Cost of equity 13.20% - 16.10% 14.65%
Tax rate 25.50% - 25.70% 25.60%
Cost of debt 4.00% - 7.50% 5.75%
WACC 13.1% - 15.9% 14.5%
WACC

MGL.NS WACC calculation

Category Low High
Long-term bond rate 6.9% 7.4%
Equity market risk premium 8.3% 9.3%
Adjusted beta 0.76 0.88
Additional risk adjustments 0.0% 0.5%
Cost of equity 13.20% 16.10%
Tax rate 25.50% 25.70%
Debt/Equity ratio 0.01 0.01
Cost of debt 4.00% 7.50%
After-tax WACC 13.1% 15.9%
Selected WACC 14.5%

MGL.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 MGL.NS:

cost_of_equity (14.65%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.76) + 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.