MMP.NS WACC - Weighted Average Cost of Capital

The WACC of MMP Industries Ltd (MMP.NS) is 14.6%.

The Cost of Equity of MMP Industries Ltd (MMP.NS) is 16.15%.

The Cost of Debt of MMP Industries Ltd (MMP.NS) is 9.50%.

	Range	Selected
Cost of equity	13.60% - 18.70%	16.15%
Tax rate	21.90% - 22.20%	22.05%
Cost of debt	8.10% - 10.90%	9.50%
WACC	12.3% - 16.9%	14.6%

WACC

MMP.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.81	1.16

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.60%	18.70%

Tax rate	21.90%	22.20%
Debt/Equity ratio	0.21	0.21
Cost of debt	8.10%	10.90%

After-tax WACC	12.3%	16.9%


Selected WACC	14.6%

MMP.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 MMP.NS:

cost_of_equity (16.15%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.81) + 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.