BANKBARODA.NS WACC - Weighted Average Cost of Capital

The WACC of Bank of Baroda Ltd (BANKBARODA.NS) is 10.7%.

The Cost of Equity of Bank of Baroda Ltd (BANKBARODA.NS) is 18.65%.

The Cost of Debt of Bank of Baroda Ltd (BANKBARODA.NS) is 5.00%.

	Range	Selected
Cost of equity	16.40% - 20.90%	18.65%
Tax rate	27.50% - 28.60%	28.05%
Cost of debt	5.00% - 5.00%	5.00%
WACC	9.6% - 11.7%	10.7%

WACC

BANKBARODA.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.14	1.4

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.40%	20.90%

Tax rate	27.50%	28.60%
Debt/Equity ratio	1.12	1.12
Cost of debt	5.00%	5.00%

After-tax WACC	9.6%	11.7%


Selected WACC	10.7%

BANKBARODA.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 BANKBARODA.NS:

cost_of_equity (18.65%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.14) + 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.