MSTCLTD.NS WACC - Weighted Average Cost of Capital

The WACC of MSTC Ltd (MSTCLTD.NS) is 14.0%.

The Cost of Equity of MSTC Ltd (MSTCLTD.NS) is 14.45%.

The Cost of Debt of MSTC Ltd (MSTCLTD.NS) is 4.25%.

	Range	Selected
Cost of equity	12.30% - 16.60%	14.45%
Tax rate	22.60% - 31.90%	27.25%
Cost of debt	4.00% - 4.50%	4.25%
WACC	12.0% - 16.1%	14.0%

WACC

MSTCLTD.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.66	0.93

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.30%	16.60%

Tax rate	22.60%	31.90%
Debt/Equity ratio	0.04	0.04
Cost of debt	4.00%	4.50%

After-tax WACC	12.0%	16.1%


Selected WACC	14.0%

MSTCLTD.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 MSTCLTD.NS:

cost_of_equity (14.45%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.66) + 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.