CANBK.NS
Canara Bank Ltd
Price:  
108.20 
INR
Volume:  
23,534,776.00
India | Banks
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CANBK.NS WACC - Weighted Average Cost of Capital

The WACC of Canara Bank Ltd (CANBK.NS) is 11.3%.

The Cost of Equity of Canara Bank Ltd (CANBK.NS) is 18.45%.
The Cost of Debt of Canara Bank Ltd (CANBK.NS) is 5.00%.

Range Selected
Cost of equity 16.80% - 20.10% 18.45%
Tax rate 25.70% - 27.80% 26.75%
Cost of debt 5.00% - 5.00% 5.00%
WACC 10.4% - 12.1% 11.3%
WACC

CANBK.NS WACC calculation

Category Low High
Long-term bond rate 6.9% 7.4%
Equity market risk premium 8.3% 9.3%
Adjusted beta 1.19 1.32
Additional risk adjustments 0.0% 0.5%
Cost of equity 16.80% 20.10%
Tax rate 25.70% 27.80%
Debt/Equity ratio 0.94 0.94
Cost of debt 5.00% 5.00%
After-tax WACC 10.4% 12.1%
Selected WACC 11.3%

CANBK.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 CANBK.NS:

cost_of_equity (18.45%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.19) + 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.