002220.KS WACC - Weighted Average Cost of Capital

The WACC of Hanil Iron & Steel Co Ltd (002220.KS) is 8.3%.

The Cost of Equity of Hanil Iron & Steel Co Ltd (002220.KS) is 9.50%.

The Cost of Debt of Hanil Iron & Steel Co Ltd (002220.KS) is 13.85%.

	Range	Selected
Cost of equity	7.20% - 11.80%	9.50%
Tax rate	28.40% - 48.60%	38.50%
Cost of debt	4.60% - 23.10%	13.85%
WACC	4.9% - 11.8%	8.3%

WACC

002220.KS WACC calculation

Category	Low	High

Long-term bond rate	3.1%	3.6%
Equity market risk premium	5.8%	6.8%
Adjusted beta	0.71	1.13

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.20%	11.80%

Tax rate	28.40%	48.60%
Debt/Equity ratio	1.52	1.52
Cost of debt	4.60%	23.10%

After-tax WACC	4.9%	11.8%


Selected WACC	8.3%

002220.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 002220.KS:

cost_of_equity (9.50%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (0.71) + 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.