The WACC of Vnsteel Vicasa JSC (VCA.VN) is 389.5%.
| Range | Selected | |
| Cost of equity | 8.10% - 11.40% | 9.75% |
| Tax rate | 18.50% - 19.00% | 18.75% |
| Cost of debt | 22.70% - 3,319.30% | 1,671.00% |
| WACC | 11.1% - 767.9% | 389.5% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 9.5% | 10.5% |
| Adjusted beta | 0.57 | 0.73 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.10% | 11.40% |
| Tax rate | 18.50% | 19.00% |
| Debt/Equity ratio | 0.39 | 0.39 |
| Cost of debt | 22.70% | 3,319.30% |
| After-tax WACC | 11.1% | 767.9% |
| Selected WACC | 389.5% | |
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 VCA.VN:
cost_of_equity (9.75%) = risk_free_rate (2.95%) + equity_risk_premium (10.00%) * adjusted_beta (0.57) + 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.