MUTHOOTCAP.NS WACC - Weighted Average Cost of Capital

The WACC of Muthoot Capital Services Ltd (MUTHOOTCAP.NS) is 13.0%.

The Cost of Equity of Muthoot Capital Services Ltd (MUTHOOTCAP.NS) is 36.60%.

The Cost of Debt of Muthoot Capital Services Ltd (MUTHOOTCAP.NS) is 13.90%.

	Range	Selected
Cost of equity	32.00% - 41.20%	36.60%
Tax rate	25.20% - 26.30%	25.75%
Cost of debt	12.40% - 15.40%	13.90%
WACC	11.6% - 14.4%	13.0%

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	3.02	3.58

Additional risk adjustments	0.0%	0.5%
Cost of equity	32.00%	41.20%

Tax rate	25.20%	26.30%
Debt/Equity ratio	8.77	8.77
Cost of debt	12.40%	15.40%

After-tax WACC	11.6%	14.4%


Selected WACC	13.0%

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 (36.60%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (3.02) + 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.