The WACC of Hoa Sen Group (HSG.VN) is 6.5%.
Range | Selected | |
Cost of equity | 6.8% - 8.7% | 7.75% |
Tax rate | 14.6% - 23.3% | 18.95% |
Cost of debt | 4.4% - 5.9% | 5.15% |
WACC | 5.7% - 7.2% | 6.5% |
Category | Low | High |
Long-term bond rate | 2.7% | 3.2% |
Equity market risk premium | 9.5% | 10.5% |
Adjusted beta | 0.43 | 0.47 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.8% | 8.7% |
Tax rate | 14.6% | 23.3% |
Debt/Equity ratio | 0.53 | 0.53 |
Cost of debt | 4.4% | 5.9% |
After-tax WACC | 5.7% | 7.2% |
Selected WACC | 6.5% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
HSG.VN | Hoa Sen Group | 0.53 | 1.49 | 1.03 |
6885.HK | Henan Jinma Energy Co Ltd | 7.41 | 0.71 | 0.1 |
DTL.VN | Dai Thien Loc Corp | 1.42 | 0.06 | 0.03 |
KKC.VN | KKC Metal Joint Stock Company | 0.4 | -0.37 | -0.28 |
NKG.VN | Nam Kim Steel JSC | 1.11 | 1.44 | 0.74 |
POM.VN | Pomina Steel Corp | 7.93 | 0.88 | 0.12 |
SMC.VN | SMC Trading Investment JSC | 2.93 | 0.65 | 0.19 |
TLH.VN | Tien Len Steel Corporation JSC | 3.27 | 1.48 | 0.4 |
VIS.VN | Viet Nam Italy Steel JSC | 2.79 | 0.33 | 0.1 |
Low | High | |
Unlevered beta | 0.1 | 0.17 |
Relevered beta | 0.15 | 0.21 |
Adjusted relevered beta | 0.43 | 0.47 |
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 HSG.VN:
cost_of_equity (7.75%) = risk_free_rate (2.95%) + equity_risk_premium (10.00%) * adjusted_beta (0.43) + 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.