VIPCLOTHNG.NS WACC - Weighted Average Cost of Capital

The WACC of VIP Clothing Ltd (VIPCLOTHNG.NS) is 11.4%.

The Cost of Equity of VIP Clothing Ltd (VIPCLOTHNG.NS) is 11.60%.

The Cost of Debt of VIP Clothing Ltd (VIPCLOTHNG.NS) is 18.35%.

	Range	Selected
Cost of equity	10.30% - 12.90%	11.60%
Tax rate	36.10% - 46.00%	41.05%
Cost of debt	9.80% - 26.90%	18.35%
WACC	9.5% - 13.2%	11.4%

WACC

VIPCLOTHNG.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.42	0.54

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.30%	12.90%

Tax rate	36.10%	46.00%
Debt/Equity ratio	0.25	0.25
Cost of debt	9.80%	26.90%

After-tax WACC	9.5%	13.2%


Selected WACC	11.4%

VIPCLOTHNG.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 VIPCLOTHNG.NS:

cost_of_equity (11.60%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.42) + 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.