The WACC of Hyundai Mipo Dockyard Co Ltd (010620.KS) is 7.5%.
Range | Selected | |
Cost of equity | 6.6% - 8.6% | 7.6% |
Tax rate | 23.2% - 26.5% | 24.85% |
Cost of debt | 4.0% - 4.7% | 4.35% |
WACC | 6.5% - 8.4% | 7.5% |
Category | Low | High |
Long-term bond rate | 3.1% | 3.6% |
Equity market risk premium | 5.8% | 6.8% |
Adjusted beta | 0.61 | 0.66 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.6% | 8.6% |
Tax rate | 23.2% | 26.5% |
Debt/Equity ratio | 0.03 | 0.03 |
Cost of debt | 4.0% | 4.7% |
After-tax WACC | 6.5% | 8.4% |
Selected WACC | 7.5% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
010620.KS | Hyundai Mipo Dockyard Co Ltd | 0.03 | 0.47 | 0.46 |
013570.KS | DY Corp | 1.54 | 0.88 | 0.41 |
041440.KQ | Everdigm Corp | 0.3 | 0.16 | 0.13 |
064350.KS | Hyundai Rotem Co | 0.02 | 1.62 | 1.6 |
067170.KQ | Autech Corp | 4.16 | 0.09 | 0.02 |
075580.KS | Sejin Heavy Industries Co Ltd | 0.45 | 0.69 | 0.52 |
077970.KS | STX Engine Co Ltd | 0.39 | 1.72 | 1.33 |
082740.KS | HSD Engine Co Ltd | 0.04 | 0.82 | 0.79 |
210540.KS | DY Power Corp | 0.05 | 0.41 | 0.4 |
267270.KS | Hyundai Construction Equipment Co Ltd | 0.52 | 0.4 | 0.28 |
Low | High | |
Unlevered beta | 0.4 | 0.48 |
Relevered beta | 0.42 | 0.49 |
Adjusted relevered beta | 0.61 | 0.66 |
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 010620.KS:
cost_of_equity (7.60%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (0.61) + 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.