000880.KS WACC - Weighted Average Cost of Capital
The WACC of Hanwha Corp (000880.KS) is 5.6%.
| Range | Selected | |
| Cost of equity | 11.0% - 15.9% | 13.45% |
| Tax rate | 23.6% - 27.9% | 25.75% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 4.3% - 6.8% | 5.6% |
| Category | Low | High |
| Long-term bond rate | 3.1% | 3.6% |
| Equity market risk premium | 5.8% | 6.8% |
| Adjusted beta | 1.36 | 1.74 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 11.0% | 15.9% |
| Tax rate | 23.6% | 27.9% |
| Debt/Equity ratio | 5.18 | 5.18 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 4.3% | 6.8% |
| Selected WACC | 5.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 000880.KS | Hanwha Corp | 5.18 | 1.64 | 0.34 |
| 000150.KS | Doosan Corp | 0.94 | 1.94 | 1.16 |
| 001040.KS | CJ Corp | 3.13 | 1.03 | 0.31 |
| 002020.KS | Kolon Corp | 3.19 | 1.94 | 0.58 |
| 003550.KS | LG Corp | 0.05 | 0.7 | 0.68 |
| 004800.KS | Hyosung Corp | 0.74 | 0.5 | 0.33 |
| 004990.KS | Lotte Corp | 3.66 | 0.84 | 0.23 |
| 028260.KS | Samsung C&T Corp | 0.15 | 0.76 | 0.69 |
| 034730.KS | SK Holdings Co Ltd | 5.67 | 1.44 | 0.28 |
| 267.HK | CITIC Ltd | 8.11 | 0.95 | 0.14 |
| Low | High | |
| Unlevered beta | 0.32 | 0.44 |
| Relevered beta | 1.54 | 2.1 |
| Adjusted relevered beta | 1.36 | 1.74 |
000880.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 000880.KS:
cost_of_equity (13.45%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (1.36) + 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.