KSB.NS WACC - Weighted Average Cost of Capital

The WACC of KSB Ltd (KSB.NS) is 11.7%.

The Cost of Equity of KSB Ltd (KSB.NS) is 11.70%.

The Cost of Debt of KSB Ltd (KSB.NS) is 59.80%.

	Range	Selected
Cost of equity	10.40% - 13.00%	11.70%
Tax rate	25.50% - 25.60%	25.55%
Cost of debt	7.50% - 112.10%	59.80%
WACC	10.4% - 13.0%	11.7%

WACC

KSB.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.42	0.55

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.40%	13.00%

Tax rate	25.50%	25.60%
Debt/Equity ratio	0	0
Cost of debt	7.50%	112.10%

After-tax WACC	10.4%	13.0%


Selected WACC	11.7%

KSB.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 KSB.NS:

cost_of_equity (11.70%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.42) + 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.