VNJA WACC - Weighted Average Cost of Capital
The WACC of Vanjia Corp (VNJA) is 6.0%.
| Range | Selected | |
| Cost of equity | 7.1% - 9.4% | 8.25% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.4% - 6.5% | 6.0% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.71 | 0.81 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.1% | 9.4% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.4% | 6.5% |
| Selected WACC | 6.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| VNJA | Vanjia Corp | 0.97 | 0.26 | 0.15 |
| BZH | Beazer Homes USA Inc | 1.45 | 0.85 | 0.41 |
| DFH | Dream Finders Homes Inc | 0.58 | 1.14 | 0.8 |
| GRBK | Green Brick Partners Inc | 0.14 | 0.76 | 0.69 |
| HOV | Hovnanian Enterprises Inc | 1.49 | 0.87 | 0.42 |
| IBP | Installed Building Products Inc | 0.19 | 0.76 | 0.66 |
| LGIH | LGI Homes Inc | 1.11 | 0.65 | 0.36 |
| LSEA | Landsea Homes Corp | 1.77 | 0.66 | 0.29 |
| NVR | NVR Inc | 0.04 | 0.14 | 0.13 |
| STHI | Sprout Tiny Homes Inc | 5.23 | -2.01 | -0.42 |
| TRAF.L | Trafalgar Property Group PLC | 10.36 | 0.66 | 0.08 |
| Low | High | |
| Unlevered beta | 0.29 | 0.41 |
| Relevered beta | 0.57 | 0.72 |
| Adjusted relevered beta | 0.71 | 0.81 |
VNJA'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 VNJA:
cost_of_equity (8.25%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.71) + 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.