VFQS.QA WACC - Weighted Average Cost of Capital
The WACC of Vodafone Qatar PQSC (VFQS.QA) is 8.8%.
| Range | Selected | |
| Cost of equity | 7.9% - 10.4% | 9.15% |
| Tax rate | 5.1% - 8.8% | 6.95% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 7.7% - 9.9% | 8.8% |
| Category | Low | High |
| Long-term bond rate | 5.0% | 5.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.48 | 0.62 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.9% | 10.4% |
| Tax rate | 5.1% | 8.8% |
| Debt/Equity ratio | 0.08 | 0.08 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 7.7% | 9.9% |
| Selected WACC | 8.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| VFQS.QA | Vodafone Qatar PQSC | 0.08 | 1.2 | 1.12 |
| 002148.SZ | Beijing Bewinner Communications Co Ltd | 0 | 1.13 | 1.13 |
| 215.HK | Hutchison Telecommunications Hong Kong Holdings Ltd | 0.1 | 0.23 | 0.21 |
| 315.HK | Smartone Telecommunications Holdings Ltd | 0.2 | 0.24 | 0.2 |
| 9424.T | Japan Communications Inc | 0.08 | 1.01 | 0.94 |
| 9436.T | Okinawa Cellular Telephone Co | 0 | 0.35 | 0.35 |
| BAI.SI | Sevak Ltd | 0.02 | -1.21 | -1.2 |
| FREN.JK | Smartfren Telecom Tbk PT | 1.65 | 0.02 | 0.01 |
| RCOM.NS | Reliance Communications Ltd | 135.55 | 0.03 | 0 |
| TTML.NS | Tata Teleservices (Maharashtra) Ltd | 1.56 | 1.2 | 0.5 |
| Low | High | |
| Unlevered beta | 0.21 | 0.41 |
| Relevered beta | 0.22 | 0.43 |
| Adjusted relevered beta | 0.48 | 0.62 |
VFQS.QA's CAPM model and how its cost of Equity is calculated
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 VFQS.QA:
cost_of_equity (9.15%) = risk_free_rate (5.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.48) + 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.