MHRIL.NS WACC - Weighted Average Cost of Capital

The WACC of Mahindra Holidays and Resorts India Ltd (MHRIL.NS) is 11.3%.

The Cost of Equity of Mahindra Holidays and Resorts India Ltd (MHRIL.NS) is 15.65%.

The Cost of Debt of Mahindra Holidays and Resorts India Ltd (MHRIL.NS) is 7.20%.

	Range	Selected
Cost of equity	13.30% - 18.00%	15.65%
Tax rate	34.10% - 36.30%	35.20%
Cost of debt	4.40% - 10.00%	7.20%
WACC	9.2% - 13.4%	11.3%

WACC

MHRIL.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.77	1.08

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.30%	18.00%

Tax rate	34.10%	36.30%
Debt/Equity ratio	0.65	0.65
Cost of debt	4.40%	10.00%

After-tax WACC	9.2%	13.4%


Selected WACC	11.3%

MHRIL.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 MHRIL.NS:

cost_of_equity (15.65%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.77) + 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.