MRPL.NS WACC - Weighted Average Cost of Capital

The WACC of Mangalore Refinery and Petrochemicals Ltd (MRPL.NS) is 14.1%.

The Cost of Equity of Mangalore Refinery and Petrochemicals Ltd (MRPL.NS) is 17.40%.

The Cost of Debt of Mangalore Refinery and Petrochemicals Ltd (MRPL.NS) is 12.20%.

	Range	Selected
Cost of equity	15.40% - 19.40%	17.40%
Tax rate	27.60% - 36.00%	31.80%
Cost of debt	5.80% - 18.60%	12.20%
WACC	11.5% - 16.8%	14.1%

WACC

MRPL.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.03	1.24

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.40%	19.40%

Tax rate	27.60%	36.00%
Debt/Equity ratio	0.54	0.54
Cost of debt	5.80%	18.60%

After-tax WACC	11.5%	16.8%


Selected WACC	14.1%

MRPL.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 MRPL.NS:

cost_of_equity (17.40%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.03) + 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.