VMART.NS WACC - Weighted Average Cost of Capital

The WACC of V-mart Retail Ltd (VMART.NS) is 13.6%.

The Cost of Equity of V-mart Retail Ltd (VMART.NS) is 14.45%.

The Cost of Debt of V-mart Retail Ltd (VMART.NS) is 9.95%.

	Range	Selected
Cost of equity	12.60% - 16.30%	14.45%
Tax rate	16.50% - 22.30%	19.40%
Cost of debt	9.10% - 10.80%	9.95%
WACC	11.9% - 15.2%	13.6%

WACC

VMART.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.69	0.9

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.60%	16.30%

Tax rate	16.50%	22.30%
Debt/Equity ratio	0.15	0.15
Cost of debt	9.10%	10.80%

After-tax WACC	11.9%	15.2%


Selected WACC	13.6%

VMART.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 VMART.NS:

cost_of_equity (14.45%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.69) + 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.