The WACC of Thuan Phuoc Seafoods and Trading Corp (THP.VN) is 9.6%.
| Range | Selected | |
| Cost of equity | 14.60% - 20.20% | 17.40% |
| Tax rate | 19.10% - 21.60% | 20.35% |
| Cost of debt | 5.00% - 14.50% | 9.75% |
| WACC | 6.1% - 13.1% | 9.6% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 9.5% | 10.5% |
| Adjusted beta | 1.24 | 1.56 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 14.60% | 20.20% |
| Tax rate | 19.10% | 21.60% |
| Debt/Equity ratio | 4.14 | 4.14 |
| Cost of debt | 5.00% | 14.50% |
| After-tax WACC | 6.1% | 13.1% |
| Selected WACC | 9.6% | |
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 THP.VN:
cost_of_equity (17.40%) = risk_free_rate (2.95%) + equity_risk_premium (10.00%) * adjusted_beta (1.24) + 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.