The WACC of Hud4 Investment and Construction JSC (HU4.VN) is 7.8%.
Range | Selected | |
Cost of equity | 8.5% - 13.0% | 10.75% |
Tax rate | 27.3% - 32.9% | 30.1% |
Cost of debt | 4.3% - 14.5% | 9.4% |
WACC | 4.9% - 10.8% | 7.8% |
Category | Low | High |
Long-term bond rate | 2.7% | 3.2% |
Equity market risk premium | 9.5% | 10.5% |
Adjusted beta | 0.6 | 0.88 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 8.5% | 13.0% |
Tax rate | 27.3% | 32.9% |
Debt/Equity ratio | 2.03 | 2.03 |
Cost of debt | 4.3% | 14.5% |
After-tax WACC | 4.9% | 10.8% |
Selected WACC | 7.8% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
HU4.VN | Hud4 Investment and Construction JSC | 2.03 | 1.36 | 0.56 |
CI5.VN | No5 Construction Investment JSC | 0.21 | -0.25 | -0.22 |
H11.VN | Hud101 Construction JSC | 3.8 | -0.22 | -0.06 |
NDX.VN | Danang Housing Development JSC | 1.03 | 0.4 | 0.23 |
RCC.VN | Railway Construction Corporation JSC | 0.57 | 0.1 | 0.07 |
TL4.VN | Hydraulics Construction Corp No.4 JSC | 0.01 | 0.87 | 0.86 |
Low | High | |
Unlevered beta | 0.07 | 0.23 |
Relevered beta | 0.4 | 0.82 |
Adjusted relevered beta | 0.6 | 0.88 |
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 HU4.VN:
cost_of_equity (10.75%) = risk_free_rate (2.95%) + equity_risk_premium (10.00%) * adjusted_beta (0.6) + 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.