The WACC of MRO-TEK Reality Ltd (MRO-TEK.NS) is 13.3%.
Range | Selected | |
Cost of equity | 14.0% - 17.7% | 15.85% |
Tax rate | 3.7% - 5.4% | 4.55% |
Cost of debt | 10.5% - 12.1% | 11.3% |
WACC | 12.0% - 14.5% | 13.3% |
Category | Low | High |
Long-term bond rate | 6.9% | 7.4% |
Equity market risk premium | 8.3% | 9.3% |
Adjusted beta | 0.86 | 1.06 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 14.0% | 17.7% |
Tax rate | 3.7% | 5.4% |
Debt/Equity ratio | 1.02 | 1.02 |
Cost of debt | 10.5% | 12.1% |
After-tax WACC | 12.0% | 14.5% |
Selected WACC | 13.3% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
MRO-TEK.NS | MRO-TEK Reality Ltd | 1.02 | 0.75 | 0.38 |
517258.BO | Precision Electronics Ltd | 0.11 | 0.64 | 0.58 |
526775.BO | Valiant Communications Ltd | 0 | 1.05 | 1.05 |
532406.BO | Avantel Ltd | 0 | 1.18 | 1.18 |
532975.BO | Aishwarya Technologies and Telecom Ltd | 0.09 | 0.58 | 0.54 |
BCC.AX | Beam Communications Holdings Ltd | 0.05 | 1.05 | 1 |
KAVVERITEL.NS | Kavveri Telecom Products Ltd | 0.17 | 0.38 | 0.33 |
TNTELE.NS | Tamilnadu Telecommunication Ltd | 0.71 | 0.21 | 0.13 |
TST.VN | Telecommunication Technical Service JSC | 0.73 | 0.25 | 0.14 |
UNI.VN | Vien Lien JSC | 0.94 | 0.36 | 0.19 |
Low | High | |
Unlevered beta | 0.36 | 0.56 |
Relevered beta | 0.79 | 1.09 |
Adjusted relevered beta | 0.86 | 1.06 |
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 MRO-TEK.NS:
cost_of_equity (15.85%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.86) + 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.