BANKINDIA.NS
Bank of India Ltd
Price:  
115.38 
INR
Volume:  
5,180,525.00
India | Banks
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BANKINDIA.NS WACC - Weighted Average Cost of Capital

The WACC of Bank of India Ltd (BANKINDIA.NS) is 10.1%.

The Cost of Equity of Bank of India Ltd (BANKINDIA.NS) is 21.00%.
The Cost of Debt of Bank of India Ltd (BANKINDIA.NS) is 5.00%.

Range Selected
Cost of equity 18.10% - 23.90% 21.00%
Tax rate 36.20% - 36.80% 36.50%
Cost of debt 5.00% - 5.00% 5.00%
WACC 9.0% - 11.2% 10.1%
WACC

BANKINDIA.NS WACC calculation

Category Low High
Long-term bond rate 6.9% 7.4%
Equity market risk premium 8.3% 9.3%
Adjusted beta 1.35 1.72
Additional risk adjustments 0.0% 0.5%
Cost of equity 18.10% 23.90%
Tax rate 36.20% 36.80%
Debt/Equity ratio 1.57 1.57
Cost of debt 5.00% 5.00%
After-tax WACC 9.0% 11.2%
Selected WACC 10.1%

BANKINDIA.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 BANKINDIA.NS:

cost_of_equity (21.00%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.35) + 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.