ARMANFIN.NS WACC - Weighted Average Cost of Capital

The WACC of Arman Financial Services Ltd (ARMANFIN.NS) is 13.6%.

The Cost of Equity of Arman Financial Services Ltd (ARMANFIN.NS) is 18.25%.

The Cost of Debt of Arman Financial Services Ltd (ARMANFIN.NS) is 12.35%.

	Range	Selected
Cost of equity	16.60% - 19.90%	18.25%
Tax rate	23.50% - 24.30%	23.90%
Cost of debt	10.50% - 14.20%	12.35%
WACC	12.1% - 15.1%	13.6%

WACC

ARMANFIN.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.17	1.29

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.60%	19.90%

Tax rate	23.50%	24.30%
Debt/Equity ratio	1.12	1.12
Cost of debt	10.50%	14.20%

After-tax WACC	12.1%	15.1%


Selected WACC	13.6%

ARMANFIN.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 ARMANFIN.NS:

cost_of_equity (18.25%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.17) + 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.