006120.KS
SK Discovery Co Ltd
Price:  
60,400 
KRW
Volume:  
39,911
Korea, Republic of | Oil, Gas & Consumable Fuels

006120.KS WACC - Weighted Average Cost of Capital

The WACC of SK Discovery Co Ltd (006120.KS) is 6.8%.

The Cost of Equity of SK Discovery Co Ltd (006120.KS) is 7.95%.
The Cost of Debt of SK Discovery Co Ltd (006120.KS) is 9.45%.

RangeSelected
Cost of equity6.4% - 9.5%7.95%
Tax rate27.8% - 30.1%28.95%
Cost of debt4.0% - 14.9%9.45%
WACC3.4% - 10.3%6.8%
WACC

006120.KS WACC calculation

CategoryLowHigh
Long-term bond rate3.1%3.6%
Equity market risk premium5.8%6.8%
Adjusted beta0.570.8
Additional risk adjustments0.0%0.5%
Cost of equity6.4%9.5%
Tax rate27.8%30.1%
Debt/Equity ratio
5.65.6
Cost of debt4.0%14.9%
After-tax WACC3.4%10.3%
Selected WACC6.8%

006120.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 006120.KS:

cost_of_equity (7.95%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (0.57) + 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.