005300.KS WACC - Weighted Average Cost of Capital
The WACC of Lotte Chilsung Beverage Co Ltd (005300.KS) is 5.5%.
| Range | Selected | |
| Cost of equity | 7.1% - 9.1% | 8.1% |
| Tax rate | 22.2% - 24.2% | 23.2% |
| Cost of debt | 4.0% - 6.2% | 5.1% |
| WACC | 4.6% - 6.3% | 5.5% |
| Category | Low | High |
| Long-term bond rate | 3.1% | 3.6% |
| Equity market risk premium | 5.8% | 6.8% |
| Adjusted beta | 0.69 | 0.74 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.1% | 9.1% |
| Tax rate | 22.2% | 24.2% |
| Debt/Equity ratio | 1.72 | 1.72 |
| Cost of debt | 4.0% | 6.2% |
| After-tax WACC | 4.6% | 6.3% |
| Selected WACC | 5.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 005300.KS | Lotte Chilsung Beverage Co Ltd | 1.72 | 0.48 | 0.21 |
| 000080.KS | HiteJinro Co Ltd | 0.79 | 0.39 | 0.24 |
| 000140.KS | HiteJinro Holdings Co Ltd | 8.42 | 0.23 | 0.03 |
| 1234.TW | Hey-Song Corp | 0.1 | 0.23 | 0.22 |
| 2573.T | Hokkaido Coca Cola Bottling Co Ltd | 0.02 | 0.26 | 0.25 |
| 506.HK | China Foods Ltd | 0.01 | 0.27 | 0.27 |
| F&N.KL | Fraser & Neave Holdings Bhd | 0.03 | 0.62 | 0.61 |
| OSP.BK | Osotspa PCL | 0.06 | 0.79 | 0.76 |
| SSC.BK | Sermsuk PCL | 0.03 | -0.24 | -0.23 |
| VBL.NS | Varun Beverages Ltd | 0.02 | 1.54 | 1.52 |
| Low | High | |
| Unlevered beta | 0.23 | 0.26 |
| Relevered beta | 0.54 | 0.61 |
| Adjusted relevered beta | 0.69 | 0.74 |
005300.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 005300.KS:
cost_of_equity (8.10%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (0.69) + 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.