MONTECARLO.NS WACC - Weighted Average Cost of Capital

The WACC of Monte Carlo Fashions Ltd (MONTECARLO.NS) is 13.0%.

The Cost of Equity of Monte Carlo Fashions Ltd (MONTECARLO.NS) is 15.20%.

The Cost of Debt of Monte Carlo Fashions Ltd (MONTECARLO.NS) is 10.30%.

	Range	Selected
Cost of equity	13.20% - 17.20%	15.20%
Tax rate	25.00% - 25.40%	25.20%
Cost of debt	9.10% - 11.50%	10.30%
WACC	11.3% - 14.7%	13.0%

WACC

MONTECARLO.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	1.01

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.20%	17.20%

Tax rate	25.00%	25.40%
Debt/Equity ratio	0.41	0.41
Cost of debt	9.10%	11.50%

After-tax WACC	11.3%	14.7%


Selected WACC	13.0%

MONTECARLO.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 MONTECARLO.NS:

cost_of_equity (15.20%) = 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.