The WACC of Ipa Investments Group JSC (IPA.VN) is 14.1%.
| Range | Selected | |
| Cost of equity | 8.30% - 15.80% | 12.05% |
| Tax rate | 2.10% - 5.70% | 3.90% |
| Cost of debt | 9.40% - 22.70% | 16.05% |
| WACC | 8.9% - 19.3% | 14.1% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 9.5% | 10.5% |
| Adjusted beta | 0.58 | 1.15 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.30% | 15.80% |
| Tax rate | 2.10% | 5.70% |
| Debt/Equity ratio | 1.63 | 1.63 |
| Cost of debt | 9.40% | 22.70% |
| After-tax WACC | 8.9% | 19.3% |
| Selected WACC | 14.1% | |
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 IPA.VN:
cost_of_equity (12.05%) = risk_free_rate (2.95%) + equity_risk_premium (10.00%) * adjusted_beta (0.58) + 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.