SOUTHBANK.NS
South Indian Bank Ltd
Price:  
29.48 
INR
Volume:  
36,984,744.00
India | Banks
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SOUTHBANK.NS WACC - Weighted Average Cost of Capital

The WACC of South Indian Bank Ltd (SOUTHBANK.NS) is 13.0%.

The Cost of Equity of South Indian Bank Ltd (SOUTHBANK.NS) is 18.35%.
The Cost of Debt of South Indian Bank Ltd (SOUTHBANK.NS) is 5.00%.

Range Selected
Cost of equity 16.50% - 20.20% 18.35%
Tax rate 29.40% - 30.00% 29.70%
Cost of debt 5.00% - 5.00% 5.00%
WACC 11.9% - 14.2% 13.0%
WACC

SOUTHBANK.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 1.33
Additional risk adjustments 0.0% 0.5%
Cost of equity 16.50% 20.20%
Tax rate 29.40% 30.00%
Debt/Equity ratio 0.56 0.56
Cost of debt 5.00% 5.00%
After-tax WACC 11.9% 14.2%
Selected WACC 13.0%

SOUTHBANK.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 SOUTHBANK.NS:

cost_of_equity (18.35%) = 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.