003650.KS WACC - Weighted Average Cost of Capital
The WACC of Michang Oil Ind Co Ltd (003650.KS) is 7.7%.
| Range | Selected | |
| Cost of equity | 6.9% - 10.1% | 8.5% |
| Tax rate | 21.8% - 23.3% | 22.55% |
| Cost of debt | 4.0% - 8.5% | 6.25% |
| WACC | 6.1% - 9.4% | 7.7% |
| Category | Low | High |
| Long-term bond rate | 3.1% | 3.6% |
| Equity market risk premium | 5.8% | 6.8% |
| Adjusted beta | 0.66 | 0.89 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.9% | 10.1% |
| Tax rate | 21.8% | 23.3% |
| Debt/Equity ratio | 0.28 | 0.28 |
| Cost of debt | 4.0% | 8.5% |
| After-tax WACC | 6.1% | 9.4% |
| Selected WACC | 7.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 003650.KS | Michang Oil Ind Co Ltd | 0.28 | 0.15 | 0.13 |
| 002960.KS | Hankook Shell Oil Co Ltd | 0 | 0.35 | 0.35 |
| 010950.KS | S-Oil Corp | 1.1 | 0.92 | 0.49 |
| 060900.KQ | Daehan Green Power Corp | 0.24 | -0.1 | -0.08 |
| 096770.KS | SK Innovation Co Ltd | 2.69 | 1.35 | 0.44 |
| 137950.KQ | JC Chemical Corp Ltd | 1.68 | 0.61 | 0.26 |
| 2030.SR | Saudi Arabian Refineries Company SJSC | 0 | 1.33 | 1.33 |
| 688196.SS | Longyan Zhuoyue New Energy Co Ltd | 0.12 | 1.07 | 0.98 |
| BSR.VN | Binh Son Refining and Petrochemical JSC | 0.2 | 1.16 | 1 |
| GULFPETRO.NS | GP Petroleums Ltd | 0.14 | 1.97 | 1.77 |
| Low | High | |
| Unlevered beta | 0.4 | 0.69 |
| Relevered beta | 0.49 | 0.84 |
| Adjusted relevered beta | 0.66 | 0.89 |
003650.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 003650.KS:
cost_of_equity (8.50%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (0.66) + 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.