NMDC.NS WACC - Weighted Average Cost of Capital

The WACC of NMDC Ltd (NMDC.NS) is 17.5%.

The Cost of Equity of NMDC Ltd (NMDC.NS) is 18.10%.

The Cost of Debt of NMDC Ltd (NMDC.NS) is 10.50%.

	Range	Selected
Cost of equity	16.50% - 19.70%	18.10%
Tax rate	28.10% - 29.00%	28.55%
Cost of debt	7.50% - 13.50%	10.50%
WACC	15.9% - 19.2%	17.5%

WACC

NMDC.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.16	1.27

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.50%	19.70%

Tax rate	28.10%	29.00%
Debt/Equity ratio	0.05	0.05
Cost of debt	7.50%	13.50%

After-tax WACC	15.9%	19.2%


Selected WACC	17.5%

NMDC.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 NMDC.NS:

cost_of_equity (18.10%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.16) + 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.