The WACC of Hoang Anh Gia Lai Agricultural JSC (HNG.VN) is 7.6%.
| Range | Selected | |
| Cost of equity | 8.70% - 13.30% | 11.00% |
| Tax rate | 0.80% - 6.20% | 3.50% |
| Cost of debt | 4.30% - 7.00% | 5.65% |
| WACC | 6.0% - 9.2% | 7.6% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 9.5% | 10.5% |
| Adjusted beta | 0.63 | 0.91 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.70% | 13.30% |
| Tax rate | 0.80% | 6.20% |
| Debt/Equity ratio | 1.51 | 1.51 |
| Cost of debt | 4.30% | 7.00% |
| After-tax WACC | 6.0% | 9.2% |
| Selected WACC | 7.6% | |
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 HNG.VN:
cost_of_equity (11.00%) = risk_free_rate (2.95%) + equity_risk_premium (10.00%) * adjusted_beta (0.63) + 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.