The WACC of CII Infrastructure Construction JSC (CEE.VN) is 10.8%.
| Range | Selected | |
| Cost of equity | 7.30% - 9.80% | 8.55% |
| Tax rate | 22.50% - 22.60% | 22.55% |
| Cost of debt | 9.70% - 20.70% | 15.20% |
| WACC | 7.5% - 14.2% | 10.8% |
| Category | Low | High |
| Long-term bond rate | 3.3% | 3.8% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 0.49 | 0.59 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.30% | 9.80% |
| Tax rate | 22.50% | 22.60% |
| Debt/Equity ratio | 2.4 | 2.4 |
| Cost of debt | 9.70% | 20.70% |
| After-tax WACC | 7.5% | 14.2% |
| Selected WACC | 10.8% | |
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 CEE.VN:
cost_of_equity (8.55%) = risk_free_rate (3.55%) + equity_risk_premium (8.80%) * adjusted_beta (0.49) + 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.