ARVINDFASN.NS
Arvind Fashions Ltd
Price:  
448 
INR
Volume:  
274,446
India | Specialty Retail

ARVINDFASN.NS WACC - Weighted Average Cost of Capital

The WACC of Arvind Fashions Ltd (ARVINDFASN.NS) is 11.9%.

The Cost of Equity of Arvind Fashions Ltd (ARVINDFASN.NS) is 12.9%.
The Cost of Debt of Arvind Fashions Ltd (ARVINDFASN.NS) is 8%.

RangeSelected
Cost of equity11.8% - 14.0%12.9%
Tax rate16.4% - 22.5%19.45%
Cost of debt7.9% - 8.1%8%
WACC11.0% - 12.8%11.9%
WACC

ARVINDFASN.NS WACC calculation

CategoryLowHigh
Long-term bond rate6.9%7.4%
Equity market risk premium8.3%9.3%
Adjusted beta0.60.66
Additional risk adjustments0.0%0.5%
Cost of equity11.8%14.0%
Tax rate16.4%22.5%
Debt/Equity ratio
0.190.19
Cost of debt7.9%8.1%
After-tax WACC11.0%12.8%
Selected WACC11.9%

ARVINDFASN.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 ARVINDFASN.NS:

cost_of_equity (12.90%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.6) + 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.