The WACC of Phuong Anh International JSC (PAS.VN) is 9.6%.
| Range | Selected | |
| Cost of equity | 11.10% - 17.30% | 14.20% |
| Tax rate | 23.60% - 30.40% | 27.00% |
| Cost of debt | 9.40% - 14.50% | 11.95% |
| WACC | 7.8% - 11.4% | 9.6% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 9.5% | 10.5% |
| Adjusted beta | 0.88 | 1.29 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 11.10% | 17.30% |
| Tax rate | 23.60% | 30.40% |
| Debt/Equity ratio | 4.75 | 4.75 |
| Cost of debt | 9.40% | 14.50% |
| After-tax WACC | 7.8% | 11.4% |
| Selected WACC | 9.6% | |
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 PAS.VN:
cost_of_equity (14.20%) = risk_free_rate (2.95%) + equity_risk_premium (10.00%) * adjusted_beta (0.88) + 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.