ARVIND.NS WACC - Weighted Average Cost of Capital

The WACC of Arvind Ltd (ARVIND.NS) is 14.2%.

The Cost of Equity of Arvind Ltd (ARVIND.NS) is 15.40%.

The Cost of Debt of Arvind Ltd (ARVIND.NS) is 8.50%.

	Range	Selected
Cost of equity	14.00% - 16.80%	15.40%
Tax rate	20.10% - 29.00%	24.55%
Cost of debt	8.30% - 8.70%	8.50%
WACC	13.0% - 15.5%	14.2%

WACC

ARVIND.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.85	0.96

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.00%	16.80%

Tax rate	20.10%	29.00%
Debt/Equity ratio	0.15	0.15
Cost of debt	8.30%	8.70%

After-tax WACC	13.0%	15.5%


Selected WACC	14.2%

ARVIND.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 ARVIND.NS:

cost_of_equity (15.40%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.85) + 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.