The WACC of Wonpung Mulsan Co Ltd (008290.KQ) is 5.8%.
| Range | Selected | |
| Cost of equity | 5.40% - 7.80% | 6.60% |
| Tax rate | 6.10% - 24.80% | 15.45% |
| Cost of debt | 4.80% - 7.00% | 5.90% |
| WACC | 5.0% - 6.6% | 5.8% |
| Category | Low | High |
| Long-term bond rate | 3.1% | 3.6% |
| Equity market risk premium | 5.8% | 6.8% |
| Adjusted beta | 0.23 | 0.39 |
| Additional risk adjustments | 1.0% | 1.5% |
| Cost of equity | 5.40% | 7.80% |
| Tax rate | 6.10% | 24.80% |
| Debt/Equity ratio | 0.86 | 0.86 |
| Cost of debt | 4.80% | 7.00% |
| After-tax WACC | 5.0% | 6.6% |
| Selected WACC | 5.8% | |
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 008290.KQ:
cost_of_equity (6.60%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (0.23) + risk_adjustments (1.25%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.