The WACC of Ngo Quyen Processing Export JSC (NGC.VN) is 13.0%.
| Range | Selected | |
| Cost of equity | 26.90% - 46.50% | 36.70% |
| Tax rate | 22.10% - 22.30% | 22.20% |
| Cost of debt | 4.00% - 22.70% | 13.35% |
| WACC | 5.4% - 20.5% | 13.0% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 9.5% | 10.5% |
| Adjusted beta | 2.54 | 4.07 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 26.90% | 46.50% |
| Tax rate | 22.10% | 22.30% |
| Debt/Equity ratio | 9.28 | 9.28 |
| Cost of debt | 4.00% | 22.70% |
| After-tax WACC | 5.4% | 20.5% |
| Selected WACC | 13.0% | |
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 NGC.VN:
cost_of_equity (36.70%) = risk_free_rate (2.95%) + equity_risk_premium (10.00%) * adjusted_beta (2.54) + 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.