The WACC of Sai Gon Thuong Tin Real Estate JSC (SCR.VN) is 11.0%.
| Range | Selected | |
| Cost of equity | 11.80% - 18.10% | 14.95% |
| Tax rate | 14.20% - 23.40% | 18.80% |
| Cost of debt | 7.00% - 13.60% | 10.30% |
| WACC | 8.4% - 13.6% | 11.0% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 9.5% | 10.5% |
| Adjusted beta | 0.95 | 1.36 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 11.80% | 18.10% |
| Tax rate | 14.20% | 23.40% |
| Debt/Equity ratio | 1.42 | 1.42 |
| Cost of debt | 7.00% | 13.60% |
| After-tax WACC | 8.4% | 13.6% |
| Selected WACC | 11.0% | |
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 SCR.VN:
cost_of_equity (14.95%) = risk_free_rate (2.95%) + equity_risk_premium (10.00%) * adjusted_beta (0.95) + 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.