AARVEEDEN.NS WACC - Weighted Average Cost of Capital

The WACC of Aarvee Denims and Exports Ltd (AARVEEDEN.NS) is 13.0%.

The Cost of Equity of Aarvee Denims and Exports Ltd (AARVEEDEN.NS) is 14.85%.

The Cost of Debt of Aarvee Denims and Exports Ltd (AARVEEDEN.NS) is 7.90%.

	Range	Selected
Cost of equity	12.80% - 16.90%	14.85%
Tax rate	26.90% - 32.50%	29.70%
Cost of debt	7.00% - 8.80%	7.90%
WACC	11.3% - 14.8%	13.0%

WACC

AARVEEDEN.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.71	0.97

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.80%	16.90%

Tax rate	26.90%	32.50%
Debt/Equity ratio	0.24	0.24
Cost of debt	7.00%	8.80%

After-tax WACC	11.3%	14.8%


Selected WACC	13.0%

AARVEEDEN.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 AARVEEDEN.NS:

cost_of_equity (14.85%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.71) + 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.