ARVINDFASN.NS WACC - Weighted Average Cost of Capital

The WACC of Arvind Fashions Ltd (ARVINDFASN.NS) is 11.9%.

The Cost of Equity of Arvind Fashions Ltd (ARVINDFASN.NS) is 12.85%.

The Cost of Debt of Arvind Fashions Ltd (ARVINDFASN.NS) is 10.00%.

	Range	Selected
Cost of equity	11.50% - 14.20%	12.85%
Tax rate	28.40% - 31.60%	30.00%
Cost of debt	10.00% - 10.00%	10.00%
WACC	10.8% - 13.0%	11.9%

WACC

ARVINDFASN.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.56	0.68

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.50%	14.20%

Tax rate	28.40%	31.60%
Debt/Equity ratio	0.19	0.19
Cost of debt	10.00%	10.00%

After-tax WACC	10.8%	13.0%


Selected WACC	11.9%

ARVINDFASN.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 ARVINDFASN.NS:

cost_of_equity (12.85%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.56) + 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.