MMYT
MakeMyTrip Ltd
Price:  
93.01 
USD
Volume:  
1,667,209
India | Internet & Direct Marketing Retail

MMYT WACC - Weighted Average Cost of Capital

The WACC of MakeMyTrip Ltd (MMYT) is 7.2%.

The Cost of Equity of MakeMyTrip Ltd (MMYT) is 7.25%.
The Cost of Debt of MakeMyTrip Ltd (MMYT) is 5%.

RangeSelected
Cost of equity5.8% - 8.7%7.25%
Tax rate7.9% - 12.1%10%
Cost of debt5.0% - 5.0%5%
WACC5.8% - 8.6%7.2%
WACC

MMYT WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.430.68
Additional risk adjustments0.0%0.5%
Cost of equity5.8%8.7%
Tax rate7.9%12.1%
Debt/Equity ratio
0.020.02
Cost of debt5.0%5.0%
After-tax WACC5.8%8.6%
Selected WACC7.2%

MMYT'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 MMYT:

cost_of_equity (7.25%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.43) + 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.