MPHASIS.NS WACC - Weighted Average Cost of Capital

The WACC of Mphasis Ltd (MPHASIS.NS) is 12.6%.

The Cost of Equity of Mphasis Ltd (MPHASIS.NS) is 12.90%.

The Cost of Debt of Mphasis Ltd (MPHASIS.NS) is 7.95%.

	Range	Selected
Cost of equity	11.90% - 13.90%	12.90%
Tax rate	24.80% - 25.00%	24.90%
Cost of debt	7.50% - 8.40%	7.95%
WACC	11.6% - 13.5%	12.6%

WACC

MPHASIS.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.61	0.64

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.90%	13.90%

Tax rate	24.80%	25.00%
Debt/Equity ratio	0.04	0.04
Cost of debt	7.50%	8.40%

After-tax WACC	11.6%	13.5%


Selected WACC	12.6%

MPHASIS.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 MPHASIS.NS:

cost_of_equity (12.90%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.61) + 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.