The WACC of Hansol Holdings Co Ltd (004150.KS) is 6.7%.
Range | Selected | |
Cost of equity | 6.0% - 8.3% | 7.15% |
Tax rate | 22.6% - 26.2% | 24.4% |
Cost of debt | 4.8% - 6.0% | 5.4% |
WACC | 5.7% - 7.7% | 6.7% |
Category | Low | High |
Long-term bond rate | 3.1% | 3.6% |
Equity market risk premium | 5.8% | 6.8% |
Adjusted beta | 0.5 | 0.62 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.0% | 8.3% |
Tax rate | 22.6% | 26.2% |
Debt/Equity ratio | 0.17 | 0.17 |
Cost of debt | 4.8% | 6.0% |
After-tax WACC | 5.7% | 7.7% |
Selected WACC | 6.7% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
004150.KS | Hansol Holdings Co Ltd | 0.17 | 0.68 | 0.61 |
001020.KS | PaperCorea Inc | 1.06 | -0.47 | -0.26 |
001810.KQ | Moorim SP Co Ltd | 2 | 0.58 | 0.23 |
002310.KS | Asia Paper Manufacturing Co Ltd | 0.22 | 0.53 | 0.46 |
006740.KS | Youngpoong Paper Mfg Co Ltd | 1.02 | 0.72 | 0.41 |
009200.KS | Moorim Paper Co Ltd | 16.27 | 0.29 | 0.02 |
009580.KS | Moorim P&P Co Ltd | 5.13 | 0.26 | 0.05 |
009770.KS | Sam Jung Pulp Co Ltd | 0.13 | 0.24 | 0.22 |
016590.KS | Shindaeyang Paper Co Ltd | 0.14 | 0.72 | 0.66 |
078130.KQ | Kuk Il Paper MFG Co Ltd | 0 | 0.37 | 0.37 |
Low | High | |
Unlevered beta | 0.23 | 0.39 |
Relevered beta | 0.25 | 0.43 |
Adjusted relevered beta | 0.5 | 0.62 |
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 004150.KS:
cost_of_equity (7.15%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (0.5) + 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.