ARVSMART.NS WACC - Weighted Average Cost of Capital

The WACC of Arvind Smartspaces Ltd (ARVSMART.NS) is 15.0%.

The Cost of Equity of Arvind Smartspaces Ltd (ARVSMART.NS) is 15.65%.

The Cost of Debt of Arvind Smartspaces Ltd (ARVSMART.NS) is 12.30%.

	Range	Selected
Cost of equity	11.40% - 19.90%	15.65%
Tax rate	31.40% - 33.20%	32.30%
Cost of debt	7.60% - 17.00%	12.30%
WACC	10.9% - 19.2%	15.0%

WACC

ARVSMART.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.55	1.3

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.40%	19.90%

Tax rate	31.40%	33.20%
Debt/Equity ratio	0.09	0.09
Cost of debt	7.60%	17.00%

After-tax WACC	10.9%	19.2%


Selected WACC	15.0%

ARVSMART.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 ARVSMART.NS:

cost_of_equity (15.65%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.55) + 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.