VIPIND.NS WACC - Weighted Average Cost of Capital

The WACC of V I P Industries Ltd (VIPIND.NS) is 14.2%.

The Cost of Equity of V I P Industries Ltd (VIPIND.NS) is 15.50%.

The Cost of Debt of V I P Industries Ltd (VIPIND.NS) is 8.85%.

	Range	Selected
Cost of equity	12.20% - 18.80%	15.50%
Tax rate	22.40% - 23.30%	22.85%
Cost of debt	7.00% - 10.70%	8.85%
WACC	11.2% - 17.3%	14.2%

WACC

VIPIND.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.64	1.18

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.20%	18.80%

Tax rate	22.40%	23.30%
Debt/Equity ratio	0.17	0.17
Cost of debt	7.00%	10.70%

After-tax WACC	11.2%	17.3%


Selected WACC	14.2%

VIPIND.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 VIPIND.NS:

cost_of_equity (15.50%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.64) + 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.