The WACC of Thien Viet Securities JSC (TVS.VN) is 12.5%.
| Range | Selected | |
| Cost of equity | 22.20% - 28.60% | 25.40% |
| Tax rate | 19.50% - 19.50% | 19.50% |
| Cost of debt | 4.50% - 5.20% | 4.85% |
| WACC | 11.1% - 14.0% | 12.5% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 9.5% | 10.5% |
| Adjusted beta | 2.05 | 2.37 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 22.20% | 28.60% |
| Tax rate | 19.50% | 19.50% |
| Debt/Equity ratio | 1.49 | 1.49 |
| Cost of debt | 4.50% | 5.20% |
| After-tax WACC | 11.1% | 14.0% |
| Selected WACC | 12.5% | |
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 TVS.VN:
cost_of_equity (25.40%) = risk_free_rate (2.95%) + equity_risk_premium (10.00%) * adjusted_beta (2.05) + 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.