VOD.JO
Vodacom Group Ltd
Price:  
13,934.00 
ZAR
Volume:  
1,038,656.00
South Africa | Wireless Telecommunication Services
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VOD.JO WACC - Weighted Average Cost of Capital

The WACC of Vodacom Group Ltd (VOD.JO) is 16.8%.

The Cost of Equity of Vodacom Group Ltd (VOD.JO) is 19.50%.
The Cost of Debt of Vodacom Group Ltd (VOD.JO) is 10.35%.

Range Selected
Cost of equity 18.50% - 20.50% 19.50%
Tax rate 28.10% - 29.30% 28.70%
Cost of debt 10.10% - 10.60% 10.35%
WACC 15.9% - 17.6% 16.8%
WACC

VOD.JO WACC calculation

Category Low High
Long-term bond rate 9.1% 9.6%
Equity market risk premium 9.5% 10.5%
Adjusted beta 0.98 0.98
Additional risk adjustments 0.0% 0.5%
Cost of equity 18.50% 20.50%
Tax rate 28.10% 29.30%
Debt/Equity ratio 0.29 0.29
Cost of debt 10.10% 10.60%
After-tax WACC 15.9% 17.6%
Selected WACC 16.8%

VOD.JO'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 VOD.JO:

cost_of_equity (19.50%) = risk_free_rate (9.35%) + equity_risk_premium (10.00%) * adjusted_beta (0.98) + 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.