The WACC of VNDIRECT Securities Corp (VND.VN) is 12.1%.
| Range | Selected | |
| Cost of equity | 18.00% - 23.50% | 20.75% |
| Tax rate | 19.20% - 19.80% | 19.50% |
| Cost of debt | 4.00% - 4.60% | 4.30% |
| WACC | 10.6% - 13.5% | 12.1% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 9.5% | 10.5% |
| Adjusted beta | 1.61 | 1.88 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 18.00% | 23.50% |
| Tax rate | 19.20% | 19.80% |
| Debt/Equity ratio | 1.01 | 1.01 |
| Cost of debt | 4.00% | 4.60% |
| After-tax WACC | 10.6% | 13.5% |
| Selected WACC | 12.1% | |
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 VND.VN:
cost_of_equity (20.75%) = risk_free_rate (2.95%) + equity_risk_premium (10.00%) * adjusted_beta (1.61) + 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.