The WACC of 21Vianet Group Inc (VNET) is 8.1%.
Range | Selected | |
Cost of equity | 10.0% - 14.7% | 12.35% |
Tax rate | 11.9% - 18.5% | 15.2% |
Cost of debt | 4.0% - 7.5% | 5.75% |
WACC | 6.4% - 9.9% | 8.1% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 4.6% | 5.6% |
Adjusted beta | 1.34 | 1.75 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 10.0% | 14.7% |
Tax rate | 11.9% | 18.5% |
Debt/Equity ratio | 1.28 | 1.28 |
Cost of debt | 4.0% | 7.5% |
After-tax WACC | 6.4% | 9.9% |
Selected WACC | 8.1% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
VNET | 21Vianet Group Inc | 1.28 | 1.45 | 0.7 |
CMFV | Comf5 International Inc | 1346.63 | 0 | 0 |
CXDO | Crexendo Inc | 0 | 1.6 | 1.59 |
IWBB | IWeb Inc | 0 | 1.07 | 1.07 |
LSYN | Liberated Syndication Inc | 0.05 | 0.76 | 0.72 |
MTLO.V | Martello Technologies Group Inc | 2.12 | 1.48 | 0.53 |
OKTA | Okta Inc | 0.05 | 1.04 | 1 |
SNOW | Snowflake Inc. | 0.03 | 1.42 | 1.39 |
TWLO | Twilio Inc | 0.05 | 1.41 | 1.35 |
URL.CN | NameSilo Technologies Corp | 0 | 0.73 | 0.73 |
Low | High | |
Unlevered beta | 0.73 | 1.03 |
Relevered beta | 1.51 | 2.12 |
Adjusted relevered beta | 1.34 | 1.75 |
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 (12.35%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.34) + 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.