The WACC of Transport and Industry Development Investment JSC (TCD.VN) is 11.4%.
| Range | Selected | |
| Cost of equity | 9.60% - 13.40% | 11.50% |
| Tax rate | 17.80% - 19.40% | 18.60% |
| Cost of debt | 12.70% - 14.30% | 13.50% |
| WACC | 9.8% - 12.9% | 11.4% |
| Category | Low | High |
| Long-term bond rate | 3.3% | 3.8% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 0.76 | 0.98 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.60% | 13.40% |
| Tax rate | 17.80% | 19.40% |
| Debt/Equity ratio | 0.31 | 0.31 |
| Cost of debt | 12.70% | 14.30% |
| After-tax WACC | 9.8% | 12.9% |
| Selected WACC | 11.4% | |
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 TCD.VN:
cost_of_equity (11.50%) = risk_free_rate (3.55%) + equity_risk_premium (8.80%) * adjusted_beta (0.76) + 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.