VNET
21Vianet Group Inc
Price:  
8.28 
USD
Volume:  
5,688,520.00
China | IT Services
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VNET WACC - Weighted Average Cost of Capital

The WACC of 21Vianet Group Inc (VNET) is 8.5%.

The Cost of Equity of 21Vianet Group Inc (VNET) is 11.45%.
The Cost of Debt of 21Vianet Group Inc (VNET) is 5.75%.

Range Selected
Cost of equity 9.90% - 13.00% 11.45%
Tax rate 11.90% - 18.50% 15.20%
Cost of debt 4.00% - 7.50% 5.75%
WACC 7.1% - 10.0% 8.5%
WACC

VNET WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.31 1.46
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.90% 13.00%
Tax rate 11.90% 18.50%
Debt/Equity ratio 0.79 0.79
Cost of debt 4.00% 7.50%
After-tax WACC 7.1% 10.0%
Selected WACC 8.5%

VNET'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 VNET:

cost_of_equity (11.45%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.31) + 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.