KSB.NS WACC - Weighted Average Cost of Capital

The WACC of KSB Ltd (KSB.NS) is 11.2%.

The Cost of Equity of KSB Ltd (KSB.NS) is 11.20%.

The Cost of Debt of KSB Ltd (KSB.NS) is 40.25%.

	Range	Selected
Cost of equity	10.10% - 12.30%	11.20%
Tax rate	25.30% - 25.50%	25.40%
Cost of debt	7.50% - 73.00%	40.25%
WACC	10.1% - 12.3%	11.2%

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	0.39	0.47

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.10%	12.30%

Tax rate	25.30%	25.50%
Debt/Equity ratio	0	0
Cost of debt	7.50%	73.00%

After-tax WACC	10.1%	12.3%


Selected WACC	11.2%

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 (11.20%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.39) + 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.