004720.KS WACC - Weighted Average Cost of Capital

The WACC of Wooridul Pharmaceutical Ltd (004720.KS) is 6.0%.

The Cost of Equity of Wooridul Pharmaceutical Ltd (004720.KS) is 7.40%.

The Cost of Debt of Wooridul Pharmaceutical Ltd (004720.KS) is 4.50%.

	Range	Selected
Cost of equity	6.30% - 8.50%	7.40%
Tax rate	22.50% - 24.80%	23.65%
Cost of debt	4.50% - 4.50%	4.50%
WACC	5.3% - 6.7%	6.0%

WACC

004720.KS WACC calculation

Category	Low	High

Long-term bond rate	3.1%	3.6%
Equity market risk premium	5.8%	6.8%
Adjusted beta	0.55	0.64

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.30%	8.50%

Tax rate	22.50%	24.80%
Debt/Equity ratio	0.53	0.53
Cost of debt	4.50%	4.50%

After-tax WACC	5.3%	6.7%


Selected WACC	6.0%

004720.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 004720.KS:

cost_of_equity (7.40%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (0.55) + 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.