VIPCLOTHNG.NS WACC - Weighted Average Cost of Capital

The WACC of VIP Clothing Ltd (VIPCLOTHNG.NS) is 12.2%.

The Cost of Equity of VIP Clothing Ltd (VIPCLOTHNG.NS) is 13.20%.

The Cost of Debt of VIP Clothing Ltd (VIPCLOTHNG.NS) is 10.60%.

	Range	Selected
Cost of equity	11.30% - 15.10%	13.20%
Tax rate	22.00% - 31.90%	26.95%
Cost of debt	9.10% - 12.10%	10.60%
WACC	10.5% - 13.8%	12.2%

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	0.53	0.77

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.30%	15.10%

Tax rate	22.00%	31.90%
Debt/Equity ratio	0.22	0.22
Cost of debt	9.10%	12.10%

After-tax WACC	10.5%	13.8%


Selected WACC	12.2%

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 (13.20%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.53) + 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.