011780.KS WACC - Weighted Average Cost of Capital
The WACC of Kumho Petro Chemical Co Ltd (011780.KS) is 7.6%.
| Range | Selected | |
| Cost of equity | 7.4% - 10.7% | 9.05% |
| Tax rate | 16.6% - 20.8% | 18.7% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 6.4% - 8.9% | 7.6% |
| Category | Low | High |
| Long-term bond rate | 3.1% | 3.6% |
| Equity market risk premium | 5.8% | 6.8% |
| Adjusted beta | 0.74 | 0.97 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.4% | 10.7% |
| Tax rate | 16.6% | 20.8% |
| Debt/Equity ratio | 0.34 | 0.34 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 6.4% | 8.9% |
| Selected WACC | 7.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 011780.KS | Kumho Petro Chemical Co Ltd | 0.34 | 1.09 | 0.86 |
| 003240.KS | Taekwang Industrial Co Ltd | 0.12 | 0.95 | 0.87 |
| 005950.KS | Isu Chemical Co Ltd | 3.26 | 1.54 | 0.42 |
| 006650.KS | Korea Petro Chemical Ind Co Ltd | 0.29 | 1.55 | 1.25 |
| 007690.KS | Kukdo Chemical Co Ltd | 1.48 | 0.81 | 0.37 |
| 012630.KS | HDC Holdings Co Ltd | 3.16 | -0.01 | 0 |
| 086520.KQ | Ecopro Co Ltd | 0.25 | 1.61 | 1.33 |
| 120110.KS | Kolon Industries Inc | 1.82 | 1.32 | 0.53 |
| 285130.KS | SK Chemicals Co Ltd | 1.18 | 1.31 | 0.67 |
| 298000.KS | Hyosung Chemical Corp | 18.53 | 1.44 | 0.09 |
| Low | High | |
| Unlevered beta | 0.48 | 0.74 |
| Relevered beta | 0.61 | 0.96 |
| Adjusted relevered beta | 0.74 | 0.97 |
011780.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 011780.KS:
cost_of_equity (9.05%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (0.74) + 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.