DCBBANK.NS
DCB Bank Ltd
Price:  
147.00 
INR
Volume:  
3,159,157.00
India | Banks
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DCBBANK.NS WACC - Weighted Average Cost of Capital

The WACC of DCB Bank Ltd (DCBBANK.NS) is 9.9%.

The Cost of Equity of DCB Bank Ltd (DCBBANK.NS) is 22.25%.
The Cost of Debt of DCB Bank Ltd (DCBBANK.NS) is 5.00%.

Range Selected
Cost of equity 20.20% - 24.30% 22.25%
Tax rate 25.80% - 25.80% 25.80%
Cost of debt 5.00% - 5.00% 5.00%
WACC 9.3% - 10.6% 9.9%
WACC

DCBBANK.NS WACC calculation

Category Low High
Long-term bond rate 6.9% 7.4%
Equity market risk premium 8.3% 9.3%
Adjusted beta 1.61 1.76
Additional risk adjustments 0.0% 0.5%
Cost of equity 20.20% 24.30%
Tax rate 25.80% 25.80%
Debt/Equity ratio 1.97 1.97
Cost of debt 5.00% 5.00%
After-tax WACC 9.3% 10.6%
Selected WACC 9.9%

DCBBANK.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 DCBBANK.NS:

cost_of_equity (22.25%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.61) + 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.