003850.KS WACC - Weighted Average Cost of Capital
The WACC of Boryung Pharm Co Ltd (003850.KS) is 7.2%.
| Range | Selected | |
| Cost of equity | 7.0% - 9.2% | 8.1% |
| Tax rate | 27.3% - 28.7% | 28% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 6.2% - 8.1% | 7.2% |
| Category | Low | High |
| Long-term bond rate | 3.1% | 3.6% |
| Equity market risk premium | 5.8% | 6.8% |
| Adjusted beta | 0.67 | 0.75 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.0% | 9.2% |
| Tax rate | 27.3% | 28.7% |
| Debt/Equity ratio | 0.23 | 0.23 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 6.2% | 8.1% |
| Selected WACC | 7.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 003850.KS | Boryung Pharm Co Ltd | 0.23 | 0.77 | 0.66 |
| 001060.KS | JW Pharmaceutical Corp | 0.18 | 0.95 | 0.84 |
| 001630.KS | Chongkundang Holdings Corp | 1.98 | 0.53 | 0.22 |
| 002390.KS | Handok Inc | 2.39 | 0.54 | 0.2 |
| 084110.KQ | Huons Global Co Ltd | 0.53 | 1.03 | 0.74 |
| 086450.KQ | Dongkook Pharmaceutical Co Ltd | 0.1 | 0.13 | 0.12 |
| 170900.KS | Dong-A ST Co Ltd | 1.12 | 0.56 | 0.31 |
| 243070.KQ | Huons Co Ltd | 0.55 | 0.8 | 0.57 |
| 249420.KS | Il Dong Pharmaceutical Co Ltd | 0.66 | 0.77 | 0.52 |
| 271980.KS | Jeil Pharmaceutical Co Ltd | 0.43 | 0.68 | 0.52 |
| Low | High | |
| Unlevered beta | 0.44 | 0.54 |
| Relevered beta | 0.51 | 0.63 |
| Adjusted relevered beta | 0.67 | 0.75 |
003850.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 003850.KS:
cost_of_equity (8.10%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (0.67) + 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.