PGD.VN WACC - Weighted Average Cost of Capital
The WACC of Petrovietnam Low Pressure Gas Distribution JSC (PGD.VN) is 9.0%.
| Range | Selected | |
| Cost of equity | 11.6% - 16.5% | 14.05% |
| Tax rate | 20.7% - 20.8% | 20.75% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 7.8% - 10.2% | 9.0% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 9.5% | 10.5% |
| Adjusted beta | 0.93 | 1.21 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 11.6% | 16.5% |
| Tax rate | 20.7% | 20.8% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 7.8% | 10.2% |
| Selected WACC | 9.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| PGD.VN | Petrovietnam Low Pressure Gas Distribution JSC | 1 | 0.19 | 0.11 |
| 000593.SZ | Sichuan Datong Gas Development Co Ltd | 0.36 | 0.93 | 0.73 |
| 034590.KS | Incheon City Gas Co Ltd | 0.17 | 0.07 | 0.06 |
| 1430.HK | Suchuang Gas Corp Ltd | 0.15 | 0.18 | 0.16 |
| 600333.SS | Changchun Gas Co Ltd | 0.77 | 0.72 | 0.45 |
| 603053.SS | Chengdu Gas Group Co Ltd | 0.03 | 0.76 | 0.74 |
| 603080.SS | Xinjiang Torch Gas Co Ltd | 0.04 | 0.88 | 0.86 |
| 6828.HK | Beijing Gas Blue Sky Holdings Ltd | 2.79 | 1.83 | 0.57 |
| 7UP.BK | Seven Utilities and Power PCL | 0.33 | 1.71 | 1.36 |
| 9537.T | Hokuriku Gas Co Ltd | 0.07 | 0.14 | 0.13 |
| MGL.NS | Mahanagar Gas Ltd | 0.01 | 1.33 | 1.32 |
| Low | High | |
| Unlevered beta | 0.45 | 0.73 |
| Relevered beta | 0.9 | 1.31 |
| Adjusted relevered beta | 0.93 | 1.21 |
PGD.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 PGD.VN:
cost_of_equity (14.05%) = risk_free_rate (2.95%) + equity_risk_premium (10.00%) * adjusted_beta (0.93) + 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.