SBIN.NS
State Bank of India
Price:  
812.3 
INR
Volume:  
22,037,314
India | Banks

SBIN.NS WACC - Weighted Average Cost of Capital

The WACC of State Bank of India (SBIN.NS) is 10.7%.

The Cost of Equity of State Bank of India (SBIN.NS) is 16.55%.
The Cost of Debt of State Bank of India (SBIN.NS) is 5%.

RangeSelected
Cost of equity15.0% - 18.1%16.55%
Tax rate25.6% - 25.8%25.7%
Cost of debt5.0% - 5.0%5%
WACC9.8% - 11.5%10.7%
WACC

SBIN.NS WACC calculation

CategoryLowHigh
Long-term bond rate6.9%7.4%
Equity market risk premium8.3%9.3%
Adjusted beta0.971.1
Additional risk adjustments0.0%0.5%
Cost of equity15.0%18.1%
Tax rate25.6%25.8%
Debt/Equity ratio
0.840.84
Cost of debt5.0%5.0%
After-tax WACC9.8%11.5%
Selected WACC10.7%

SBIN.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 SBIN.NS:

cost_of_equity (16.55%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.97) + 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.