VMART.NS WACC - Weighted Average Cost of Capital

The WACC of V-mart Retail Ltd (VMART.NS) is 15.3%.

The Cost of Equity of V-mart Retail Ltd (VMART.NS) is 15.80%.

The Cost of Debt of V-mart Retail Ltd (VMART.NS) is 17.00%.

	Range	Selected
Cost of equity	14.00% - 17.60%	15.80%
Tax rate	20.10% - 29.90%	25.00%
Cost of debt	15.40% - 18.60%	17.00%
WACC	13.7% - 16.9%	15.3%

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	0.85	1.05

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.00%	17.60%

Tax rate	20.10%	29.90%
Debt/Equity ratio	0.2	0.2
Cost of debt	15.40%	18.60%

After-tax WACC	13.7%	16.9%


Selected WACC	15.3%

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 (15.80%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.85) + 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.