The WACC of Dzi An Mechanoelectric JSC (DZM.VN) is 6.9%.
Range | Selected | |
Cost of equity | 7.7% - 12.7% | 10.2% |
Tax rate | 22.1% - 22.3% | 22.2% |
Cost of debt | 5.0% - 7.0% | 6% |
WACC | 5.4% - 8.3% | 6.9% |
Category | Low | High |
Long-term bond rate | 2.7% | 3.2% |
Equity market risk premium | 9.5% | 10.5% |
Adjusted beta | 0.52 | 0.86 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 7.7% | 12.7% |
Tax rate | 22.1% | 22.3% |
Debt/Equity ratio | 1.53 | 1.53 |
Cost of debt | 5.0% | 7.0% |
After-tax WACC | 5.4% | 8.3% |
Selected WACC | 6.9% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
DZM.VN | Dzi An Mechanoelectric JSC | 1.53 | 0.98 | 0.45 |
540358.BO | RMC Switchgears Ltd | 0.06 | 0.03 | 0.02 |
540614.BO | G G Engineering Ltd | 0.02 | 1.07 | 1.05 |
AWM.SI | Shanghai Turbo Enterprises Ltd | 0.15 | 1.39 | 1.24 |
BJD.SI | Vibropower Corporation Ltd | 2.41 | -0.77 | -0.27 |
CJC.VN | Central Area Electrical Mechanical JSC | 0.46 | 0.27 | 0.2 |
QHD.VN | Viet Duc Welding Electrode JSC | 0.11 | -0.04 | -0.04 |
TARAPUR.NS | Tarapur Transformers Ltd | 0.19 | 1.58 | 1.38 |
TSB.VN | Tiasang Battery JSC | 0.11 | 0.34 | 0.32 |
VTH.VN | Viet Thai Electric Cable Corp | 4.49 | -0.24 | -0.05 |
Low | High | |
Unlevered beta | 0.13 | 0.37 |
Relevered beta | 0.28 | 0.79 |
Adjusted relevered beta | 0.52 | 0.86 |
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 DZM.VN:
cost_of_equity (10.20%) = risk_free_rate (2.95%) + equity_risk_premium (10.00%) * adjusted_beta (0.52) + 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.