The WACC of Song Da 3 JSC (SD3.VN) is 5.9%.
| Range | Selected | |
| Cost of equity | 12.30% - 20.90% | 16.60% |
| Tax rate | 13.60% - 28.90% | 21.25% |
| Cost of debt | 4.00% - 7.00% | 5.50% |
| WACC | 4.7% - 7.2% | 5.9% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 9.5% | 10.5% |
| Adjusted beta | 1 | 1.63 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 12.30% | 20.90% |
| Tax rate | 13.60% | 28.90% |
| Debt/Equity ratio | 6.2 | 6.2 |
| Cost of debt | 4.00% | 7.00% |
| After-tax WACC | 4.7% | 7.2% |
| Selected WACC | 5.9% | |
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 SD3.VN:
cost_of_equity (16.60%) = risk_free_rate (2.95%) + equity_risk_premium (10.00%) * adjusted_beta (1) + 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.