KSL.NS WACC - Weighted Average Cost of Capital

The WACC of Kalyani Steels Ltd (KSL.NS) is 16.8%.

The Cost of Equity of Kalyani Steels Ltd (KSL.NS) is 17.85%.

The Cost of Debt of Kalyani Steels Ltd (KSL.NS) is 8.40%.

	Range	Selected
Cost of equity	16.40% - 19.30%	17.85%
Tax rate	25.50% - 25.70%	25.60%
Cost of debt	7.90% - 8.90%	8.40%
WACC	15.4% - 18.1%	16.8%

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	1.15	1.23

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.40%	19.30%

Tax rate	25.50%	25.70%
Debt/Equity ratio	0.1	0.1
Cost of debt	7.90%	8.90%

After-tax WACC	15.4%	18.1%


Selected WACC	16.8%

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 (17.85%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.15) + 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.