006840.KS
AK Holdings Inc
Price:  
12,160 
KRW
Volume:  
13,231
Korea, Republic of | Industrial Conglomerates

006840.KS WACC - Weighted Average Cost of Capital

The WACC of AK Holdings Inc (006840.KS) is 5.2%.

The Cost of Equity of AK Holdings Inc (006840.KS) is 18.2%.
The Cost of Debt of AK Holdings Inc (006840.KS) is 5.55%.

RangeSelected
Cost of equity14.6% - 21.8%18.2%
Tax rate19.3% - 20.9%20.1%
Cost of debt4.1% - 7.0%5.55%
WACC4.0% - 6.5%5.2%
WACC

006840.KS WACC calculation

CategoryLowHigh
Long-term bond rate3.1%3.6%
Equity market risk premium5.8%6.8%
Adjusted beta1.982.6
Additional risk adjustments0.0%0.5%
Cost of equity14.6%21.8%
Tax rate19.3%20.9%
Debt/Equity ratio
16.4616.46
Cost of debt4.1%7.0%
After-tax WACC4.0%6.5%
Selected WACC5.2%

006840.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 006840.KS:

cost_of_equity (18.20%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (1.98) + 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.