The WACC of Dat Phuong JSC (DPG.VN) is 7.8%.
| Range | Selected | |
| Cost of equity | 8.10% - 11.80% | 9.95% |
| Tax rate | 15.20% - 17.40% | 16.30% |
| Cost of debt | 5.00% - 7.20% | 6.10% |
| WACC | 6.3% - 9.2% | 7.8% |
| Category | Low | High |
| Long-term bond rate | 3.3% | 3.8% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 0.58 | 0.81 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.10% | 11.80% |
| Tax rate | 15.20% | 17.40% |
| Debt/Equity ratio | 0.81 | 0.81 |
| Cost of debt | 5.00% | 7.20% |
| After-tax WACC | 6.3% | 9.2% |
| Selected WACC | 7.8% | |
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 DPG.VN:
cost_of_equity (9.95%) = risk_free_rate (3.55%) + equity_risk_premium (8.80%) * adjusted_beta (0.58) + 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.