KSB.NS WACC - Weighted Average Cost of Capital

The WACC of KSB Ltd (KSB.NS) is 11.9%.

The Cost of Equity of KSB Ltd (KSB.NS) is 11.90%.

The Cost of Debt of KSB Ltd (KSB.NS) is 62.75%.

	Range	Selected
Cost of equity	10.70% - 13.10%	11.90%
Tax rate	25.30% - 25.50%	25.40%
Cost of debt	7.50% - 118.00%	62.75%
WACC	10.7% - 13.1%	11.9%

WACC

KSB.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.46	0.56

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.70%	13.10%

Tax rate	25.30%	25.50%
Debt/Equity ratio	0	0
Cost of debt	7.50%	118.00%

After-tax WACC	10.7%	13.1%


Selected WACC	11.9%

KSB.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 KSB.NS:

cost_of_equity (11.90%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.46) + 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.