AARVEEDEN.NS WACC - Weighted Average Cost of Capital

The WACC of Aarvee Denims and Exports Ltd (AARVEEDEN.NS) is 13.1%.

The Cost of Equity of Aarvee Denims and Exports Ltd (AARVEEDEN.NS) is 12.50%.

The Cost of Debt of Aarvee Denims and Exports Ltd (AARVEEDEN.NS) is 18.80%.

	Range	Selected
Cost of equity	10.60% - 14.40%	12.50%
Tax rate	24.70% - 26.20%	25.45%
Cost of debt	10.70% - 26.90%	18.80%
WACC	9.5% - 16.8%	13.1%

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	0.45	0.7

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.60%	14.40%

Tax rate	24.70%	26.20%
Debt/Equity ratio	0.78	0.78
Cost of debt	10.70%	26.90%

After-tax WACC	9.5%	16.8%


Selected WACC	13.1%

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 (12.50%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.45) + 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.