The WACC of Vinacomin Investment, Trading And Service JSC (ITS.VN) is 11.8%.
| Range | Selected | |
| Cost of equity | 12.40% - 21.00% | 16.70% |
| Tax rate | 22.10% - 22.30% | 22.20% |
| Cost of debt | 9.10% - 19.70% | 14.40% |
| WACC | 7.7% - 16.0% | 11.8% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 9.5% | 10.5% |
| Adjusted beta | 1.01 | 1.64 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 12.40% | 21.00% |
| Tax rate | 22.10% | 22.30% |
| Debt/Equity ratio | 7.71 | 7.71 |
| Cost of debt | 9.10% | 19.70% |
| After-tax WACC | 7.7% | 16.0% |
| Selected WACC | 11.8% | |
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 ITS.VN:
cost_of_equity (16.70%) = risk_free_rate (2.95%) + equity_risk_premium (10.00%) * adjusted_beta (1.01) + 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.