VNET
21Vianet Group Inc
Price:  
7.08 
USD
Volume:  
15,083,193.00
China | IT Services
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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%.

Range Selected
Cost of equity 10.00% - 14.70% 12.35%
Tax rate 11.90% - 18.50% 15.20%
Cost of debt 4.00% - 7.50% 5.75%
WACC 6.4% - 9.9% 8.1%
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 1.34 1.75
Additional risk adjustments 0.0% 0.5%
Cost of equity 10.00% 14.70%
Tax rate 11.90% 18.50%
Debt/Equity ratio 1.28 1.28
Cost of debt 4.00% 7.50%
After-tax WACC 6.4% 9.9%
Selected WACC 8.1%

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.