HDB.VN WACC - Weighted Average Cost of Capital
The WACC of Ho Chi Minh City Development Joint Stock Commercial Bank (HDB.VN) is 8.6%.
| Range | Selected | |
| Cost of equity | 12.2% - 14.9% | 13.55% |
| Tax rate | 20.1% - 20.3% | 20.2% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 8.0% - 9.3% | 8.6% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 9.5% | 10.5% |
| Adjusted beta | 0.99 | 1.07 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 12.2% | 14.9% |
| Tax rate | 20.1% | 20.3% |
| Debt/Equity ratio | 1.06 | 1.06 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 8.0% | 9.3% |
| Selected WACC | 8.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| HDB.VN | Ho Chi Minh City Development Joint Stock Commercial Bank | 1.06 | 1.05 | 0.57 |
| ACB.VN | Asia Commercial Joint Stock Bank | 1.31 | 0.93 | 0.46 |
| EIB.VN | Vietnam Export Import Commercial Joint Stock Bank | 0.52 | 0.87 | 0.61 |
| MBB.VN | Military Commercial Joint Stock Bank | 1.12 | 0.91 | 0.48 |
| RBLBANK.NS | RBL Bank Ltd | 0.89 | 1.97 | 1.15 |
| SHB.VN | Sai Gon Ha Noi Commercial Joint Stock Bank | 0.33 | 0.75 | 0.59 |
| STB.VN | Saigon Thuong Tin Commercial Joint Stock Bank | 0.6 | 0.88 | 0.6 |
| TCB.VN | Vietnam Technological And Commercial Joint Stock Bank | 0.93 | 1.29 | 0.74 |
| TPB.VN | Tien Phong Commercial Joint Stock Bank | 1.56 | 1.04 | 0.46 |
| VIB.VN | Viet Nam International Commercial Joint Stock Bank | 1.3 | 0.79 | 0.39 |
| Low | High | |
| Unlevered beta | 0.53 | 0.6 |
| Relevered beta | 0.99 | 1.1 |
| Adjusted relevered beta | 0.99 | 1.07 |
HDB.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 HDB.VN:
cost_of_equity (13.55%) = risk_free_rate (2.95%) + equity_risk_premium (10.00%) * adjusted_beta (0.99) + 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.