The WACC of VIX Securities JSC (VIX.VN) is 11.1%.
| Range | Selected | |
| Cost of equity | 10.80% - 14.10% | 12.45% |
| Tax rate | 18.80% - 19.10% | 18.95% |
| Cost of debt | 7.00% - 7.00% | 7.00% |
| WACC | 9.8% - 12.5% | 11.1% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 9.5% | 10.5% |
| Adjusted beta | 0.84 | 0.99 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.80% | 14.10% |
| Tax rate | 18.80% | 19.10% |
| Debt/Equity ratio | 0.25 | 0.25 |
| Cost of debt | 7.00% | 7.00% |
| After-tax WACC | 9.8% | 12.5% |
| Selected WACC | 11.1% | |
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 VIX.VN:
cost_of_equity (12.45%) = risk_free_rate (2.95%) + equity_risk_premium (10.00%) * adjusted_beta (0.84) + 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.