BANKBARODA.NS
Bank of Baroda Ltd
Price:  
248.61 
INR
Volume:  
5,637,699.00
India | Banks
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BANKBARODA.NS WACC - Weighted Average Cost of Capital

The WACC of Bank of Baroda Ltd (BANKBARODA.NS) is 10.9%.

The Cost of Equity of Bank of Baroda Ltd (BANKBARODA.NS) is 17.25%.
The Cost of Debt of Bank of Baroda Ltd (BANKBARODA.NS) is 5.00%.

Range Selected
Cost of equity 15.30% - 19.20% 17.25%
Tax rate 28.60% - 48.10% 38.35%
Cost of debt 5.00% - 5.00% 5.00%
WACC 10.0% - 11.7% 10.9%
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 1.01 1.22
Additional risk adjustments 0.0% 0.5%
Cost of equity 15.30% 19.20%
Tax rate 28.60% 48.10%
Debt/Equity ratio 0.82 0.82
Cost of debt 5.00% 5.00%
After-tax WACC 10.0% 11.7%
Selected WACC 10.9%

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 (17.25%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.01) + 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.