MRPL.NS WACC - Weighted Average Cost of Capital

The WACC of Mangalore Refinery and Petrochemicals Ltd (MRPL.NS) is 12.9%.

The Cost of Equity of Mangalore Refinery and Petrochemicals Ltd (MRPL.NS) is 16.85%.

The Cost of Debt of Mangalore Refinery and Petrochemicals Ltd (MRPL.NS) is 7.70%.

	Range	Selected
Cost of equity	14.90% - 18.80%	16.85%
Tax rate	21.80% - 29.10%	25.45%
Cost of debt	4.90% - 10.50%	7.70%
WACC	11.0% - 14.8%	12.9%

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	0.96	1.18

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.90%	18.80%

Tax rate	21.80%	29.10%
Debt/Equity ratio	0.54	0.54
Cost of debt	4.90%	10.50%

After-tax WACC	11.0%	14.8%


Selected WACC	12.9%

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 (16.85%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.96) + 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.