The WACC of Asia Pacific Investment JSC (API.VN) is 8.9%.
| Range | Selected | |
| Cost of equity | 12.80% - 19.90% | 16.35% |
| Tax rate | 22.40% - 29.70% | 26.05% |
| Cost of debt | 4.00% - 7.00% | 5.50% |
| WACC | 7.0% - 10.9% | 8.9% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 9.5% | 10.5% |
| Adjusted beta | 1.06 | 1.53 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 12.80% | 19.90% |
| Tax rate | 22.40% | 29.70% |
| Debt/Equity ratio | 1.51 | 1.51 |
| Cost of debt | 4.00% | 7.00% |
| After-tax WACC | 7.0% | 10.9% |
| Selected WACC | 8.9% | |
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 API.VN:
cost_of_equity (16.35%) = risk_free_rate (2.95%) + equity_risk_premium (10.00%) * adjusted_beta (1.06) + 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.