The WACC of Hankook Cosmetics Manufacturing Co Ltd (003350.KS) is 9.0%.
Range | Selected | |
Cost of equity | 7.7% - 10.7% | 9.2% |
Tax rate | 11.3% - 17.1% | 14.2% |
Cost of debt | 4.0% - 4.5% | 4.25% |
WACC | 7.5% - 10.4% | 9.0% |
Category | Low | High |
Long-term bond rate | 3.1% | 3.6% |
Equity market risk premium | 5.8% | 6.8% |
Adjusted beta | 0.8 | 0.97 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 7.7% | 10.7% |
Tax rate | 11.3% | 17.1% |
Debt/Equity ratio | 0.05 | 0.05 |
Cost of debt | 4.0% | 4.5% |
After-tax WACC | 7.5% | 10.4% |
Selected WACC | 9.0% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
003350.KS | Hankook Cosmetics Manufacturing Co Ltd | 0.05 | 0.64 | 0.62 |
016100.KQ | Leaders Cosmetics Co Ltd | 0.53 | 0.41 | 0.28 |
025620.KS | Jayjun Cosmetic Co Ltd | 0.15 | 0.42 | 0.37 |
027050.KQ | Coreana Cosmetics Co Ltd | 0.06 | 1.08 | 1.03 |
092730.KQ | NeoPharm Co Ltd | 0 | 0.39 | 0.39 |
194700.KQ | Novarex Co Ltd | 0.14 | 1.17 | 1.05 |
214260.KQ | Raphas Co Ltd | 0.23 | 1 | 0.84 |
214420.KS | Tonymoly Co Ltd | 0.26 | 1.32 | 1.09 |
234690.KQ | Green Cross WellBeing Corp | 0.2 | 0.83 | 0.71 |
270870.KQ | NewTree Co Ltd | 0.17 | 1.52 | 1.33 |
Low | High | |
Unlevered beta | 0.68 | 0.92 |
Relevered beta | 0.7 | 0.96 |
Adjusted relevered beta | 0.8 | 0.97 |
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 003350.KS:
cost_of_equity (9.20%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (0.8) + 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.