MSPL.NS WACC - Weighted Average Cost of Capital

The WACC of MSP Steel & Power Ltd (MSPL.NS) is 16.3%.

The Cost of Equity of MSP Steel & Power Ltd (MSPL.NS) is 20.15%.

The Cost of Debt of MSP Steel & Power Ltd (MSPL.NS) is 10.70%.

	Range	Selected
Cost of equity	18.60% - 21.70%	20.15%
Tax rate	13.00% - 20.70%	16.85%
Cost of debt	6.00% - 15.40%	10.70%
WACC	14.1% - 18.5%	16.3%

WACC

MSPL.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.41	1.49

Additional risk adjustments	0.0%	0.5%
Cost of equity	18.60%	21.70%

Tax rate	13.00%	20.70%
Debt/Equity ratio	0.51	0.51
Cost of debt	6.00%	15.40%

After-tax WACC	14.1%	18.5%


Selected WACC	16.3%

MSPL.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 MSPL.NS:

cost_of_equity (20.15%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.41) + 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.