The WACC of General Materials Biochemistry Fertilizer JSC (HSI.VN) is 13.5%.
| Range | Selected | |
| Cost of equity | 19.70% - 40.80% | 30.25% |
| Tax rate | 0.10% - 3.20% | 1.65% |
| Cost of debt | 4.00% - 22.70% | 13.35% |
| WACC | 4.4% - 22.5% | 13.5% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 9.5% | 10.5% |
| Adjusted beta | 1.79 | 3.53 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 19.70% | 40.80% |
| Tax rate | 0.10% | 3.20% |
| Debt/Equity ratio | 35.5 | 35.5 |
| Cost of debt | 4.00% | 22.70% |
| After-tax WACC | 4.4% | 22.5% |
| Selected WACC | 13.5% | |
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 HSI.VN:
cost_of_equity (30.25%) = risk_free_rate (2.95%) + equity_risk_premium (10.00%) * adjusted_beta (1.79) + 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.