UCOBANK.NS WACC - Weighted Average Cost of Capital

The WACC of UCO Bank (UCOBANK.NS) is 12.8%.

The Cost of Equity of UCO Bank (UCOBANK.NS) is 19.15%.

The Cost of Debt of UCO Bank (UCOBANK.NS) is 5.00%.

	Range	Selected
Cost of equity	17.70% - 20.60%	19.15%
Tax rate	36.10% - 40.50%	38.30%
Cost of debt	5.00% - 5.00%	5.00%
WACC	11.9% - 13.6%	12.8%

WACC

UCOBANK.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.3	1.37

Additional risk adjustments	0.0%	0.5%
Cost of equity	17.70%	20.60%

Tax rate	36.10%	40.50%
Debt/Equity ratio	0.66	0.66
Cost of debt	5.00%	5.00%

After-tax WACC	11.9%	13.6%


Selected WACC	12.8%

UCOBANK.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 UCOBANK.NS:

cost_of_equity (19.15%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.3) + 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.