HVN.VN WACC - Weighted Average Cost of Capital
The WACC of Vietnam Airlines JSC (HVN.VN) is 10.4%.
| Range | Selected | |
| Cost of equity | 10.3% - 13.9% | 12.1% |
| Tax rate | 2.5% - 3.5% | 3% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 9.0% - 11.9% | 10.4% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 9.5% | 10.5% |
| Adjusted beta | 0.8 | 0.97 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.3% | 13.9% |
| Tax rate | 2.5% | 3.5% |
| Debt/Equity ratio | 0.27 | 0.27 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 9.0% | 11.9% |
| Selected WACC | 10.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| HVN.VN | Vietnam Airlines JSC | 0.27 | 1.31 | 1.04 |
| 002928.SZ | China Express Airlines Co Ltd | 1.54 | 1.47 | 0.59 |
| 180640.KS | Hanjin Kal | 0.08 | 0.92 | 0.85 |
| AIRARABIA.DB | Air Arabia PJSC | 0.13 | 1.21 | 1.08 |
| BA.BK | Bangkok Airways PCL | 0.46 | 0.99 | 0.69 |
| HELI.JK | Jaya Trishindo Tbk PT | 0.35 | 1.36 | 1.01 |
| SPICEJET.NS | Spicejet Ltd | 3.84 | 1.99 | 0.42 |
| THAI.BK | Thai Airways International PCL | 26.57 | 0.91 | 0.03 |
| UTAR.ME | Aviakompaniya UTair PAO | 0.54 | -0.52 | -0.34 |
| VJC.VN | Vietjet Aviation JSC | 0.86 | 0.84 | 0.45 |
| Low | High | |
| Unlevered beta | 0.53 | 0.75 |
| Relevered beta | 0.7 | 0.96 |
| Adjusted relevered beta | 0.8 | 0.97 |
HVN.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 HVN.VN:
cost_of_equity (12.10%) = risk_free_rate (2.95%) + equity_risk_premium (10.00%) * adjusted_beta (0.8) + 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.