MIC.NS WACC - Weighted Average Cost of Capital

The WACC of MIC Electronics Ltd (MIC.NS) is 10.1%.

The Cost of Equity of MIC Electronics Ltd (MIC.NS) is 18.70%.

The Cost of Debt of MIC Electronics Ltd (MIC.NS) is 6.50%.

	Range	Selected
Cost of equity	15.10% - 22.30%	18.70%
Tax rate	30.00% - 31.80%	30.90%
Cost of debt	6.00% - 7.00%	6.50%
WACC	8.5% - 11.8%	10.1%

WACC

MIC.NS WACC calculation

Category	Low	High

Long-term bond rate	7.5%	8.0%
Equity market risk premium	6.9%	7.9%
Adjusted beta	1.09	1.74

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.10%	22.30%

Tax rate	30.00%	31.80%
Debt/Equity ratio	1.51	1.51
Cost of debt	6.00%	7.00%

After-tax WACC	8.5%	11.8%


Selected WACC	10.1%

MIC.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 MIC.NS:

cost_of_equity (18.70%) = risk_free_rate (7.75%) + equity_risk_premium (7.40%) * adjusted_beta (1.09) + 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.