YESBANK.NS WACC - Weighted Average Cost of Capital

The WACC of Yes Bank Ltd (YESBANK.NS) is 11.9%.

The Cost of Equity of Yes Bank Ltd (YESBANK.NS) is 21.45%.

The Cost of Debt of Yes Bank Ltd (YESBANK.NS) is 5.00%.

	Range	Selected
Cost of equity	18.80% - 24.10%	21.45%
Tax rate	24.70% - 25.30%	25.00%
Cost of debt	5.00% - 5.00%	5.00%
WACC	10.7% - 13.2%	11.9%

WACC

YESBANK.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.44	1.74

Additional risk adjustments	0.0%	0.5%
Cost of equity	18.80%	24.10%

Tax rate	24.70%	25.30%
Debt/Equity ratio	1.16	1.16
Cost of debt	5.00%	5.00%

After-tax WACC	10.7%	13.2%


Selected WACC	11.9%

YESBANK.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 YESBANK.NS:

cost_of_equity (21.45%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.44) + 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.