The WACC of Silla Textile (001000.KQ) is 7.2%.
| Range | Selected | |
| Cost of equity | 5.50% - 7.30% | 6.40% |
| Tax rate | 22.10% - 22.30% | 22.20% |
| Cost of debt | 4.20% - 20.10% | 12.15% |
| WACC | 4.9% - 9.4% | 7.2% |
| Category | Low | High |
| Long-term bond rate | 3.1% | 3.6% |
| Equity market risk premium | 5.8% | 6.8% |
| Adjusted beta | 0.33 | 0.39 |
| Additional risk adjustments | 0.5% | 1.0% |
| Cost of equity | 5.50% | 7.30% |
| Tax rate | 22.10% | 22.30% |
| Debt/Equity ratio | 0.35 | 0.35 |
| Cost of debt | 4.20% | 20.10% |
| After-tax WACC | 4.9% | 9.4% |
| Selected WACC | 7.2% | |
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 001000.KQ:
cost_of_equity (6.40%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (0.33) + risk_adjustments (0.75%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.