MUTHOOTCAP.NS WACC - Weighted Average Cost of Capital

The WACC of Muthoot Capital Services Ltd (MUTHOOTCAP.NS) is 11.6%.

The Cost of Equity of Muthoot Capital Services Ltd (MUTHOOTCAP.NS) is 25.70%.

The Cost of Debt of Muthoot Capital Services Ltd (MUTHOOTCAP.NS) is 10.15%.

	Range	Selected
Cost of equity	23.10% - 28.30%	25.70%
Tax rate	25.70% - 26.60%	26.15%
Cost of debt	8.20% - 12.10%	10.15%
WACC	9.9% - 13.2%	11.6%

WACC

MUTHOOTCAP.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.95	2.2

Additional risk adjustments	0.0%	0.5%
Cost of equity	23.10%	28.30%

Tax rate	25.70%	26.60%
Debt/Equity ratio	3.47	3.47
Cost of debt	8.20%	12.10%

After-tax WACC	9.9%	13.2%


Selected WACC	11.6%

MUTHOOTCAP.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 MUTHOOTCAP.NS:

cost_of_equity (25.70%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.95) + 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.