KSL.NS WACC - Weighted Average Cost of Capital

The WACC of Kalyani Steels Ltd (KSL.NS) is 18.4%.

The Cost of Equity of Kalyani Steels Ltd (KSL.NS) is 17.75%.

The Cost of Debt of Kalyani Steels Ltd (KSL.NS) is 29.70%.

	Range	Selected
Cost of equity	16.50% - 19.00%	17.75%
Tax rate	25.40% - 25.50%	25.45%
Cost of debt	7.80% - 51.60%	29.70%
WACC	14.9% - 21.8%	18.4%

WACC

KSL.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.16	1.2

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.50%	19.00%

Tax rate	25.40%	25.50%
Debt/Equity ratio	0.17	0.17
Cost of debt	7.80%	51.60%

After-tax WACC	14.9%	21.8%


Selected WACC	18.4%

KSL.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 KSL.NS:

cost_of_equity (17.75%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.16) + 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.