The WACC of TDT Investment and Development JSC (TDT.VN) is 6.5%.
| Range | Selected | |
| Cost of equity | 6.60% - 9.40% | 8.00% |
| Tax rate | 11.20% - 12.70% | 11.95% |
| Cost of debt | 6.40% - 6.70% | 6.55% |
| WACC | 5.9% - 7.0% | 6.5% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 9.5% | 10.5% |
| Adjusted beta | 0.4 | 0.54 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.60% | 9.40% |
| Tax rate | 11.20% | 12.70% |
| Debt/Equity ratio | 2.14 | 2.14 |
| Cost of debt | 6.40% | 6.70% |
| After-tax WACC | 5.9% | 7.0% |
| Selected WACC | 6.5% | |
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 TDT.VN:
cost_of_equity (8.00%) = risk_free_rate (2.95%) + equity_risk_premium (10.00%) * adjusted_beta (0.4) + 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.