MRPL.NS WACC - Weighted Average Cost of Capital

The WACC of Mangalore Refinery and Petrochemicals Ltd (MRPL.NS) is 12.8%.

The Cost of Equity of Mangalore Refinery and Petrochemicals Ltd (MRPL.NS) is 16.80%.

The Cost of Debt of Mangalore Refinery and Petrochemicals Ltd (MRPL.NS) is 6.95%.

	Range	Selected
Cost of equity	15.20% - 18.40%	16.80%
Tax rate	27.60% - 36.00%	31.80%
Cost of debt	5.80% - 8.10%	6.95%
WACC	11.5% - 14.0%	12.8%

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	1.13

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.20%	18.40%

Tax rate	27.60%	36.00%
Debt/Equity ratio	0.5	0.5
Cost of debt	5.80%	8.10%

After-tax WACC	11.5%	14.0%


Selected WACC	12.8%

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 (16.80%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1) + 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.