SZE.VN WACC - Weighted Average Cost of Capital
The WACC of Sonadezi Environment JSC (SZE.VN) is 7.7%.
| Range | Selected | |
| Cost of equity | 7.6% - 9.4% | 8.5% |
| Tax rate | 21.3% - 21.6% | 21.45% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 6.9% - 8.5% | 7.7% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 9.5% | 10.5% |
| Adjusted beta | 0.51 | 0.54 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.6% | 9.4% |
| Tax rate | 21.3% | 21.6% |
| Debt/Equity ratio | 0.18 | 0.18 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 6.9% | 8.5% |
| Selected WACC | 7.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| SZE.VN | Sonadezi Environment JSC | 0.18 | 0.72 | 0.63 |
| BMS.VN | Bao Minh Securities Co | 0.94 | 1.9 | 1.09 |
| BSG.VN | Saigon Passenger Transport JSC | 0.01 | 0.28 | 0.27 |
| DWS.VN | Dong Thap Water Supply & Urban Environment JSC | 0.29 | 0.11 | 0.09 |
| ILS.VN | International Investment Trade and Service Joint Stock Company | 0.12 | 0.01 | 0.01 |
| NS2.VN | Hanoi Water Supply Number 2 JSC | 0.63 | 0.32 | 0.21 |
| RCC.VN | Railway Construction Corporation JSC | 0.47 | 0.1 | 0.07 |
| VTR.VN | Vietnam Travel and Marketing Transports Vietravel JSC | 1.9 | 0.68 | 0.27 |
| Low | High | |
| Unlevered beta | 0.19 | 0.27 |
| Relevered beta | 0.27 | 0.31 |
| Adjusted relevered beta | 0.51 | 0.54 |
SZE.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 SZE.VN:
cost_of_equity (8.50%) = risk_free_rate (2.95%) + equity_risk_premium (10.00%) * adjusted_beta (0.51) + 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.