MUNJALSHOW.NS WACC - Weighted Average Cost of Capital

The WACC of Munjal Showa Ltd (MUNJALSHOW.NS) is 14.1%.

The Cost of Equity of Munjal Showa Ltd (MUNJALSHOW.NS) is 22.00%.

The Cost of Debt of Munjal Showa Ltd (MUNJALSHOW.NS) is 7.50%.

	Range	Selected
Cost of equity	20.00% - 24.00%	22.00%
Tax rate	16.20% - 19.90%	18.05%
Cost of debt	7.50% - 7.50%	7.50%
WACC	13.1% - 15.0%	14.1%

WACC

MUNJALSHOW.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.58	1.74

Additional risk adjustments	0.0%	0.5%
Cost of equity	20.00%	24.00%

Tax rate	16.20%	19.90%
Debt/Equity ratio	1	1
Cost of debt	7.50%	7.50%

After-tax WACC	13.1%	15.0%


Selected WACC	14.1%

MUNJALSHOW.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 MUNJALSHOW.NS:

cost_of_equity (22.00%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.58) + 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.