MOTOGENFIN.NS WACC - Weighted Average Cost of Capital

The WACC of Motor and General Finance Ltd (MOTOGENFIN.NS) is 12.0%.

The Cost of Equity of Motor and General Finance Ltd (MOTOGENFIN.NS) is 12.10%.

The Cost of Debt of Motor and General Finance Ltd (MOTOGENFIN.NS) is 7.70%.

	Range	Selected
Cost of equity	10.10% - 14.10%	12.10%
Tax rate	30.00% - 30.00%	30.00%
Cost of debt	7.50% - 7.90%	7.70%
WACC	10.1% - 14.0%	12.0%

WACC

MOTOGENFIN.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.39	0.67

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.10%	14.10%

Tax rate	30.00%	30.00%
Debt/Equity ratio	0.01	0.01
Cost of debt	7.50%	7.90%

After-tax WACC	10.1%	14.0%


Selected WACC	12.0%

MOTOGENFIN.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 MOTOGENFIN.NS:

cost_of_equity (12.10%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.39) + 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.