The WACC of Quang Binh Import and Export JSC (QBS.VN) is 11.5%.
| Range | Selected | |
| Cost of equity | 9.20% - 12.50% | 10.85% |
| Tax rate | 0.60% - 1.90% | 1.25% |
| Cost of debt | 7.00% - 24.10% | 15.55% |
| WACC | 8.9% - 14.0% | 11.5% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 9.5% | 10.5% |
| Adjusted beta | 0.68 | 0.84 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.20% | 12.50% |
| Tax rate | 0.60% | 1.90% |
| Debt/Equity ratio | 0.16 | 0.16 |
| Cost of debt | 7.00% | 24.10% |
| After-tax WACC | 8.9% | 14.0% |
| Selected WACC | 11.5% | |
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 QBS.VN:
cost_of_equity (10.85%) = risk_free_rate (2.95%) + equity_risk_premium (10.00%) * adjusted_beta (0.68) + 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.