SDD.VN
Song Da Investment and Construction JSC
Price:  
1,200 
VND
Volume:  
422,300
Viet Nam | Construction & Engineering

SDD.VN WACC - Weighted Average Cost of Capital

The WACC of Song Da Investment and Construction JSC (SDD.VN) is 4.0%.

The Cost of Equity of Song Da Investment and Construction JSC (SDD.VN) is 7.05%.
The Cost of Debt of Song Da Investment and Construction JSC (SDD.VN) is 4.25%.

RangeSelected
Cost of equity6.2% - 7.9%7.05%
Tax rate22.1% - 22.3%22.2%
Cost of debt4.0% - 4.5%4.25%
WACC3.7% - 4.3%4.0%
WACC

SDD.VN WACC calculation

CategoryLowHigh
Long-term bond rate2.7%3.2%
Equity market risk premium9.5%10.5%
Adjusted beta0.360.4
Additional risk adjustments0.0%0.5%
Cost of equity6.2%7.9%
Tax rate22.1%22.3%
Debt/Equity ratio
4.594.59
Cost of debt4.0%4.5%
After-tax WACC3.7%4.3%
Selected WACC4.0%

SDD.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 SDD.VN:

cost_of_equity (7.05%) = risk_free_rate (2.95%) + equity_risk_premium (10.00%) * adjusted_beta (0.36) + 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.