GEG.VN WACC - Weighted Average Cost of Capital
The WACC of Gia Lai Electricity JSC (GEG.VN) is 7.0%.
| Range | Selected | |
| Cost of equity | 6.0% - 7.8% | 6.9% |
| Tax rate | 10.6% - 17.6% | 14.1% |
| Cost of debt | 8.0% - 8.6% | 8.3% |
| WACC | 6.7% - 7.3% | 7.0% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 9.5% | 10.5% |
| Adjusted beta | 0.34 | 0.38 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.0% | 7.8% |
| Tax rate | 10.6% | 17.6% |
| Debt/Equity ratio | 1.62 | 1.62 |
| Cost of debt | 8.0% | 8.6% |
| After-tax WACC | 6.7% | 7.3% |
| Selected WACC | 7.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| GEG.VN | Gia Lai Electricity JSC | 1.62 | 0.88 | 0.36 |
| CHP.VN | Central Hydropower JSC | 0.12 | 0.37 | 0.33 |
| IFEC.BK | Inter Far East Energy Corporation PCL | 96.48 | 0.68 | 0.01 |
| NWF.NZ | NZ Windfarms Ltd | 0 | -1.46 | -1.46 |
| S4A.VN | Sesan 4A Hydroelectric JSC | 0.26 | -0.47 | -0.38 |
| SBA.VN | Song Ba JSC | 0.04 | 0.01 | 0.01 |
| SHP.VN | Southern Hydropower JSC | 0.01 | 0.31 | 0.31 |
| TBC.VN | Thacba Hydro Power JSC | 0.02 | -0.09 | -0.09 |
| TMP.VN | Thac Mo Hydropower JSC | 0.07 | 0.02 | 0.02 |
| VSH.VN | Vinh Son Song Hinh Hydropower JSC | 0.28 | 0.06 | 0.05 |
| Low | High | |
| Unlevered beta | 0.01 | 0.03 |
| Relevered beta | 0.01 | 0.07 |
| Adjusted relevered beta | 0.34 | 0.38 |
GEG.VN's CAPM model and how its cost of Equity is calculated
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 GEG.VN:
cost_of_equity (6.90%) = risk_free_rate (2.95%) + equity_risk_premium (10.00%) * adjusted_beta (0.34) + 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.