The WACC of Vegetexco Port JSC (VGP.VN) is 14.1%.
| Range | Selected | |
| Cost of equity | 9.90% - 20.50% | 15.20% |
| Tax rate | 20.40% - 20.40% | 20.40% |
| Cost of debt | 12.30% - 22.70% | 17.50% |
| WACC | 9.8% - 18.4% | 14.1% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 9.5% | 10.5% |
| Adjusted beta | 0.75 | 1.6 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.90% | 20.50% |
| Tax rate | 20.40% | 20.40% |
| Debt/Equity ratio | 6.72 | 6.72 |
| Cost of debt | 12.30% | 22.70% |
| After-tax WACC | 9.8% | 18.4% |
| Selected WACC | 14.1% | |
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 VGP.VN:
cost_of_equity (15.20%) = risk_free_rate (2.95%) + equity_risk_premium (10.00%) * adjusted_beta (0.75) + 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.