LAF.VN
Long An Food Processing Export JSC
Price:  
17.4 
VND
Volume:  
1,800
Viet Nam | Food Products

LAF.VN WACC - Weighted Average Cost of Capital

The WACC of Long An Food Processing Export JSC (LAF.VN) is 7.8%.

The Cost of Equity of Long An Food Processing Export JSC (LAF.VN) is 9%.
The Cost of Debt of Long An Food Processing Export JSC (LAF.VN) is 5.5%.

RangeSelected
Cost of equity7.4% - 10.6%9%
Tax rate15.9% - 20.9%18.4%
Cost of debt4.0% - 7.0%5.5%
WACC6.3% - 9.3%7.8%
WACC

LAF.VN WACC calculation

CategoryLowHigh
Long-term bond rate2.7%3.2%
Equity market risk premium9.5%10.5%
Adjusted beta0.490.66
Additional risk adjustments0.0%0.5%
Cost of equity7.4%10.6%
Tax rate15.9%20.9%
Debt/Equity ratio
0.360.36
Cost of debt4.0%7.0%
After-tax WACC6.3%9.3%
Selected WACC7.8%

LAF.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 LAF.VN:

cost_of_equity (9.00%) = risk_free_rate (2.95%) + equity_risk_premium (10.00%) * adjusted_beta (0.49) + 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.