SDK.VN
Mechanical Engineering Metallurgy JSC
Price:  
24,500 
VND
Volume:  
200
Viet Nam | Manufacturing

SDK.VN WACC - Weighted Average Cost of Capital

The WACC of Mechanical Engineering Metallurgy JSC (SDK.VN) is 8.2%.

The Cost of Equity of Mechanical Engineering Metallurgy JSC (SDK.VN) is 9.9%.
The Cost of Debt of Mechanical Engineering Metallurgy JSC (SDK.VN) is 6.05%.

RangeSelected
Cost of equity8.4% - 11.4%9.9%
Tax rate21.8% - 22.5%22.15%
Cost of debt5.1% - 7.0%6.05%
WACC7.0% - 9.4%8.2%
WACC

SDK.VN WACC calculation

CategoryLowHigh
Long-term bond rate2.7%3.2%
Equity market risk premium9.5%10.5%
Adjusted beta0.60.73
Additional risk adjustments0.0%0.5%
Cost of equity8.4%11.4%
Tax rate21.8%22.5%
Debt/Equity ratio
0.480.48
Cost of debt5.1%7.0%
After-tax WACC7.0%9.4%
Selected WACC8.2%

SDK.VN WACC - Detailed calculations of Beta

LowHigh
Unlevered beta0.430.43
Relevered beta0.40.6
Adjusted relevered beta0.60.73

SDK.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 SDK.VN:

cost_of_equity (9.90%) = risk_free_rate (2.95%) + equity_risk_premium (10.00%) * adjusted_beta (0.6) + 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.