The WACC of Licogi 13 JSC (LIG.VN) is 4.1%.
| Range | Selected | |
| Cost of equity | 9.90% - 13.60% | 11.75% |
| Tax rate | 44.60% - 48.50% | 46.55% |
| Cost of debt | 4.90% - 7.00% | 5.95% |
| WACC | 3.5% - 4.7% | 4.1% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 9.5% | 10.5% |
| Adjusted beta | 0.75 | 0.93 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.90% | 13.60% |
| Tax rate | 44.60% | 48.50% |
| Debt/Equity ratio | 7.81 | 7.81 |
| Cost of debt | 4.90% | 7.00% |
| After-tax WACC | 3.5% | 4.7% |
| Selected WACC | 4.1% | |
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 LIG.VN:
cost_of_equity (11.75%) = risk_free_rate (2.95%) + equity_risk_premium (10.00%) * adjusted_beta (0.75) + 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.