KARURVYSYA.NS WACC - Weighted Average Cost of Capital

The WACC of Karur Vysya Bank Ltd (KARURVYSYA.NS) is 14.8%.

The Cost of Equity of Karur Vysya Bank Ltd (KARURVYSYA.NS) is 15.50%.

The Cost of Debt of Karur Vysya Bank Ltd (KARURVYSYA.NS) is 5.00%.

	Range	Selected
Cost of equity	14.20% - 16.80%	15.50%
Tax rate	24.10% - 24.70%	24.40%
Cost of debt	5.00% - 5.00%	5.00%
WACC	13.6% - 16.1%	14.8%

WACC

KARURVYSYA.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.88	0.96

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.20%	16.80%

Tax rate	24.10%	24.70%
Debt/Equity ratio	0.06	0.06
Cost of debt	5.00%	5.00%

After-tax WACC	13.6%	16.1%


Selected WACC	14.8%

KARURVYSYA.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 KARURVYSYA.NS:

cost_of_equity (15.50%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.88) + 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.