The WACC of Apax Holdings JSC (IBC.VN) is 7.8%.
| Range | Selected | |
| Cost of equity | 32.90% - 50.40% | 41.65% |
| Tax rate | 28.90% - 32.00% | 30.45% |
| Cost of debt | 7.50% - 7.50% | 7.50% |
| WACC | 7.3% - 8.4% | 7.8% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 9.5% | 10.5% |
| Adjusted beta | 3.17 | 4.44 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 32.90% | 50.40% |
| Tax rate | 28.90% | 32.00% |
| Debt/Equity ratio | 13.01 | 13.01 |
| Cost of debt | 7.50% | 7.50% |
| After-tax WACC | 7.3% | 8.4% |
| Selected WACC | 7.8% | |
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 IBC.VN:
cost_of_equity (41.65%) = risk_free_rate (2.95%) + equity_risk_premium (10.00%) * adjusted_beta (3.17) + 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.