The WACC of Song Da Investment and Construction JSC (SDD.VN) is 4.0%.
Range | Selected | |
Cost of equity | 6.2% - 7.9% | 7.05% |
Tax rate | 22.1% - 22.3% | 22.2% |
Cost of debt | 4.0% - 4.5% | 4.25% |
WACC | 3.7% - 4.3% | 4.0% |
Category | Low | High |
Long-term bond rate | 2.7% | 3.2% |
Equity market risk premium | 9.5% | 10.5% |
Adjusted beta | 0.36 | 0.4 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.2% | 7.9% |
Tax rate | 22.1% | 22.3% |
Debt/Equity ratio | 4.59 | 4.59 |
Cost of debt | 4.0% | 4.5% |
After-tax WACC | 3.7% | 4.3% |
Selected WACC | 4.0% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
SDD.VN | Song Da Investment and Construction JSC | 4.59 | 1.43 | 0.31 |
CX8.VN | Constrexim No 8 Investment and Construction JSC | 0.84 | -0.33 | -0.2 |
KTT.VN | KTT Investment Group JSC | 44.16 | 0.48 | 0.01 |
LM7.VN | Lilama 7 JSC | 5.4 | -1.5 | -0.29 |
MCO.VN | BDC Viet Nam Construction and Investment JSC | 0.16 | 1.39 | 1.23 |
MEC.VN | Song Da Mechanical Assembling JSC | 7.46 | 0.97 | 0.14 |
QTC.VN | Quang Nam Construction Transportation JSC | 0.09 | 0 | 0 |
VC5.VN | Construction No5 JSC | 77.86 | 1.26 | 0.02 |
VE4.VN | Vneco4 Electricity Construction JSC | 0.09 | -0.56 | -0.53 |
VE8.VN | Vneco8 Electricity Construction JSC | 16.84 | 0.36 | 0.03 |
Low | High | |
Unlevered beta | 0.01 | 0.02 |
Relevered beta | 0.04 | 0.1 |
Adjusted relevered beta | 0.36 | 0.4 |
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.