The WACC of Woori Investment Bank Co Ltd (010050.KS) is 14.0%.
| Range | Selected | |
| Cost of equity | 6.70% - 8.90% | 7.80% |
| Tax rate | 6.10% - 14.50% | 10.30% |
| Cost of debt | 5.30% - 37.10% | 21.20% |
| WACC | 5.7% - 22.2% | 14.0% |
| Category | Low | High |
| Long-term bond rate | 3.1% | 3.6% |
| Equity market risk premium | 5.8% | 6.8% |
| Adjusted beta | 0.62 | 0.71 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.70% | 8.90% |
| Tax rate | 6.10% | 14.50% |
| Debt/Equity ratio | 1.41 | 1.41 |
| Cost of debt | 5.30% | 37.10% |
| After-tax WACC | 5.7% | 22.2% |
| Selected WACC | 14.0% | |
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 010050.KS:
cost_of_equity (7.80%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (0.62) + 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.