VNET
21Vianet Group Inc
Price:  
7.08 
USD
Volume:  
15,083,193
China | IT Services

VNET WACC - Weighted Average Cost of Capital

The WACC of 21Vianet Group Inc (VNET) is 8.1%.

The Cost of Equity of 21Vianet Group Inc (VNET) is 12.35%.
The Cost of Debt of 21Vianet Group Inc (VNET) is 5.75%.

RangeSelected
Cost of equity10.0% - 14.7%12.35%
Tax rate11.9% - 18.5%15.2%
Cost of debt4.0% - 7.5%5.75%
WACC6.4% - 9.9%8.1%
WACC

VNET WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta1.341.75
Additional risk adjustments0.0%0.5%
Cost of equity10.0%14.7%
Tax rate11.9%18.5%
Debt/Equity ratio
1.281.28
Cost of debt4.0%7.5%
After-tax WACC6.4%9.9%
Selected WACC8.1%

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 (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.