The WACC of Tien Phong Securities Corporation (ORS.VN) is 14.2%.
| Range | Selected | |
| Cost of equity | 25.50% - 33.00% | 29.25% |
| Tax rate | 20.50% - 21.70% | 21.10% |
| Cost of debt | 5.90% - 14.50% | 10.20% |
| WACC | 10.8% - 17.7% | 14.2% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 9.5% | 10.5% |
| Adjusted beta | 2.4 | 2.79 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 25.50% | 33.00% |
| Tax rate | 20.50% | 21.70% |
| Debt/Equity ratio | 2.42 | 2.42 |
| Cost of debt | 5.90% | 14.50% |
| After-tax WACC | 10.8% | 17.7% |
| Selected WACC | 14.2% | |
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 ORS.VN:
cost_of_equity (29.25%) = risk_free_rate (2.95%) + equity_risk_premium (10.00%) * adjusted_beta (2.4) + 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.