The WACC of Dongnai Plastic JSC (DNP.VN) is 11.6%.
| Range | Selected | |
| Cost of equity | 12.90% - 19.20% | 16.05% |
| Tax rate | 26.50% - 37.20% | 31.85% |
| Cost of debt | 8.30% - 22.70% | 15.50% |
| WACC | 7.7% - 15.5% | 11.6% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 9.5% | 10.5% |
| Adjusted beta | 1.07 | 1.47 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 12.90% | 19.20% |
| Tax rate | 26.50% | 37.20% |
| Debt/Equity ratio | 3.2 | 3.2 |
| Cost of debt | 8.30% | 22.70% |
| After-tax WACC | 7.7% | 15.5% |
| Selected WACC | 11.6% | |
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 DNP.VN:
cost_of_equity (16.05%) = risk_free_rate (2.95%) + equity_risk_premium (10.00%) * adjusted_beta (1.07) + 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.