BANCOINDIA.NS WACC - Weighted Average Cost of Capital

The WACC of Banco Products (India) Ltd (BANCOINDIA.NS) is 17.7%.

The Cost of Equity of Banco Products (India) Ltd (BANCOINDIA.NS) is 18.30%.

The Cost of Debt of Banco Products (India) Ltd (BANCOINDIA.NS) is 11.15%.

	Range	Selected
Cost of equity	16.80% - 19.80%	18.30%
Tax rate	24.80% - 25.80%	25.30%
Cost of debt	7.50% - 14.80%	11.15%
WACC	16.1% - 19.2%	17.7%

WACC

BANCOINDIA.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.19	1.28

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.80%	19.80%

Tax rate	24.80%	25.80%
Debt/Equity ratio	0.07	0.07
Cost of debt	7.50%	14.80%

After-tax WACC	16.1%	19.2%


Selected WACC	17.7%

BANCOINDIA.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 BANCOINDIA.NS:

cost_of_equity (18.30%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.19) + 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.