000850.KS WACC - Weighted Average Cost of Capital
The WACC of Hwacheon Machine Tool Co Ltd (000850.KS) is 6.3%.
| Range | Selected | |
| Cost of equity | 5.6% - 8.5% | 7.05% |
| Tax rate | 13.7% - 14.8% | 14.25% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 4.9% - 7.7% | 6.3% |
| Category | Low | High |
| Long-term bond rate | 3.1% | 3.6% |
| Equity market risk premium | 5.8% | 6.8% |
| Adjusted beta | 0.43 | 0.65 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.6% | 8.5% |
| Tax rate | 13.7% | 14.8% |
| Debt/Equity ratio | 0.44 | 0.44 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 4.9% | 7.7% |
| Selected WACC | 6.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 000850.KS | Hwacheon Machine Tool Co Ltd | 0.44 | 0.5 | 0.36 |
| 007530.KQ | Youngsin Metal Industrial | 1.33 | 0.23 | 0.11 |
| 010040.KS | Korea Refractories Co Ltd | 0.6 | 0.52 | 0.34 |
| 010660.KS | Hwacheon Machinery Co Ltd | 0 | 0.02 | 0.02 |
| 015590.KS | Curo Co Ltd | 0.35 | -0.67 | -0.51 |
| 033540.KQ | Paratech Co Ltd | 1.25 | 0 | 0 |
| 049800.KS | Woojin Plaimm Co Ltd | 3.16 | 0.41 | 0.11 |
| 071670.KQ | A-Tech Solution Co Ltd | 1.59 | 1.12 | 0.47 |
| 083650.KQ | BHI Co Ltd | 0.12 | 1 | 0.9 |
| 091090.KS | Sewon Cellontech Co Ltd | 0.9 | 0.82 | 0.46 |
| Low | High | |
| Unlevered beta | 0.11 | 0.35 |
| Relevered beta | 0.15 | 0.48 |
| Adjusted relevered beta | 0.43 | 0.65 |
000850.KS'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 000850.KS:
cost_of_equity (7.05%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (0.43) + 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.