ARIHANTSUP.NS WACC - Weighted Average Cost of Capital

The WACC of Arihant Superstructures Ltd (ARIHANTSUP.NS) is 12.0%.

The Cost of Equity of Arihant Superstructures Ltd (ARIHANTSUP.NS) is 13.30%.

The Cost of Debt of Arihant Superstructures Ltd (ARIHANTSUP.NS) is 9.95%.

	Range	Selected
Cost of equity	10.40% - 16.20%	13.30%
Tax rate	19.10% - 20.40%	19.75%
Cost of debt	9.10% - 10.80%	9.95%
WACC	9.7% - 14.4%	12.0%

WACC

ARIHANTSUP.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.43	0.9

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.40%	16.20%

Tax rate	19.10%	20.40%
Debt/Equity ratio	0.31	0.31
Cost of debt	9.10%	10.80%

After-tax WACC	9.7%	14.4%


Selected WACC	12.0%

ARIHANTSUP.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 ARIHANTSUP.NS:

cost_of_equity (13.30%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.43) + 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.