008420.KS WACC - Weighted Average Cost of Capital
The WACC of Moonbae Steel Co Ltd (008420.KS) is 6.7%.
| Range | Selected | |
| Cost of equity | 6.1% - 8.9% | 7.5% |
| Tax rate | 10.4% - 13.7% | 12.05% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 5.3% - 8.0% | 6.7% |
| Category | Low | High |
| Long-term bond rate | 3.1% | 3.6% |
| Equity market risk premium | 5.8% | 6.8% |
| Adjusted beta | 0.52 | 0.7 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.1% | 8.9% |
| Tax rate | 10.4% | 13.7% |
| Debt/Equity ratio | 0.42 | 0.42 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 5.3% | 8.0% |
| Selected WACC | 6.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 008420.KS | Moonbae Steel Co Ltd | 0.42 | 0.86 | 0.63 |
| 001080.KS | Manho Rope & Wire Ltd | 0.01 | -0.38 | -0.38 |
| 002220.KS | Hanil Iron & Steel Co Ltd | 2.12 | 0.75 | 0.26 |
| 009190.KS | Daiyang Metal Co Ltd | 0.29 | 0.65 | 0.52 |
| 012160.KS | YoungWire Co Ltd | 7.13 | 0.83 | 0.11 |
| 037760.KQ | Cenit Co Ltd | 1.49 | 0.25 | 0.11 |
| 038010.KQ | Jeil Technos Co Ltd | 0.24 | 0.72 | 0.59 |
| 058730.KS | Development Advance Solution Co Ltd | 2.13 | 0.17 | 0.06 |
| 071090.KS | Hi Steel Co Ltd | 0.9 | 1.68 | 0.94 |
| 090410.KQ | Duckshin Housing Co Ltd | 0.21 | 0.39 | 0.33 |
| Low | High | |
| Unlevered beta | 0.2 | 0.4 |
| Relevered beta | 0.28 | 0.55 |
| Adjusted relevered beta | 0.52 | 0.7 |
008420.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 008420.KS:
cost_of_equity (7.50%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (0.52) + 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.