MASTEK.NS WACC - Weighted Average Cost of Capital

The WACC of Mastek Ltd (MASTEK.NS) is 14.4%.

The Cost of Equity of Mastek Ltd (MASTEK.NS) is 15.30%.

The Cost of Debt of Mastek Ltd (MASTEK.NS) is 8.45%.

	Range	Selected
Cost of equity	13.90% - 16.70%	15.30%
Tax rate	21.30% - 23.70%	22.50%
Cost of debt	7.50% - 9.40%	8.45%
WACC	13.1% - 15.7%	14.4%

WACC

MASTEK.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.85	0.95

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.90%	16.70%

Tax rate	21.30%	23.70%
Debt/Equity ratio	0.11	0.11
Cost of debt	7.50%	9.40%

After-tax WACC	13.1%	15.7%


Selected WACC	14.4%

MASTEK.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 MASTEK.NS:

cost_of_equity (15.30%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.85) + 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.