The WACC of Sao Mai Group Corp (ASM.VN) is 14.3%.
| Range | Selected | |
| Cost of equity | 38.00% - 46.70% | 42.35% |
| Tax rate | 10.00% - 14.60% | 12.30% |
| Cost of debt | 6.30% - 14.50% | 10.40% |
| WACC | 10.8% - 17.9% | 14.3% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 9.5% | 10.5% |
| Adjusted beta | 3.71 | 4.09 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 38.00% | 46.70% |
| Tax rate | 10.00% | 14.60% |
| Debt/Equity ratio | 5.27 | 5.27 |
| Cost of debt | 6.30% | 14.50% |
| After-tax WACC | 10.8% | 17.9% |
| Selected WACC | 14.3% | |
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 ASM.VN:
cost_of_equity (42.35%) = risk_free_rate (2.95%) + equity_risk_premium (10.00%) * adjusted_beta (3.71) + 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.