The WACC of Aluko Co Ltd (001780.KS) is 6.8%.
Range | Selected | |
Cost of equity | 5.4% - 7.8% | 6.6% |
Tax rate | 13.6% - 23.1% | 18.35% |
Cost of debt | 5.6% - 11.6% | 8.6% |
WACC | 5.1% - 8.5% | 6.8% |
Category | Low | High |
Long-term bond rate | 3.1% | 3.6% |
Equity market risk premium | 5.8% | 6.8% |
Adjusted beta | 0.4 | 0.55 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 5.4% | 7.8% |
Tax rate | 13.6% | 23.1% |
Debt/Equity ratio | 1.89 | 1.89 |
Cost of debt | 5.6% | 11.6% |
After-tax WACC | 5.1% | 8.5% |
Selected WACC | 6.8% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
001780.KS | Aluko Co Ltd | 1.89 | 1.04 | 0.4 |
000970.KS | Korea Castiron Pipe Ind Co Ltd | 0.02 | 0.26 | 0.25 |
005750.KS | Daelim B&Co Co Ltd | 1.19 | 0.41 | 0.21 |
006570.KS | Daelim Trading Co Ltd | 1.85 | 0.03 | 0.01 |
007210.KS | Byuksan Corp | 1.41 | 0.5 | 0.23 |
035200.KQ | Plumb Fast Co Ltd | 0.01 | -0.77 | -0.77 |
039020.KQ | EAGON HOLDINGS Co Ltd | 2.21 | -0.29 | -0.1 |
109610.KQ | SY Co Ltd | 0.93 | 0.13 | 0.07 |
171120.KQ | Lion Chemtech Co Ltd | 0.17 | -0.18 | -0.16 |
3300.HK | China Glass Holdings Ltd | 17.79 | 0.94 | 0.06 |
Low | High | |
Unlevered beta | 0.04 | 0.13 |
Relevered beta | 0.1 | 0.33 |
Adjusted relevered beta | 0.4 | 0.55 |
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 001780.KS:
cost_of_equity (6.60%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (0.4) + 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.