The WACC of Vitaly JSC (VTA.VN) is 8.9%.
| Range | Selected | |
| Cost of equity | 10.80% - 15.10% | 12.95% |
| Tax rate | 12.40% - 20.80% | 16.60% |
| Cost of debt | 7.00% - 9.30% | 8.15% |
| WACC | 7.8% - 10.1% | 8.9% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 9.5% | 10.5% |
| Adjusted beta | 0.85 | 1.08 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.80% | 15.10% |
| Tax rate | 12.40% | 20.80% |
| Debt/Equity ratio | 1.81 | 1.81 |
| Cost of debt | 7.00% | 9.30% |
| After-tax WACC | 7.8% | 10.1% |
| Selected WACC | 8.9% | |
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 VTA.VN:
cost_of_equity (12.95%) = risk_free_rate (2.95%) + equity_risk_premium (10.00%) * adjusted_beta (0.85) + 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.