The WACC of Shinsung E&G Co Ltd (011930.KS) is 9.0%.
| Range | Selected | |
| Cost of equity | 10.70% - 14.00% | 12.35% |
| Tax rate | 12.60% - 17.80% | 15.20% |
| Cost of debt | 4.10% - 7.00% | 5.55% |
| WACC | 7.6% - 10.4% | 9.0% |
| Category | Low | High |
| Long-term bond rate | 3.1% | 3.6% |
| Equity market risk premium | 5.8% | 6.8% |
| Adjusted beta | 1.32 | 1.46 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.70% | 14.00% |
| Tax rate | 12.60% | 17.80% |
| Debt/Equity ratio | 0.8 | 0.8 |
| Cost of debt | 4.10% | 7.00% |
| After-tax WACC | 7.6% | 10.4% |
| Selected WACC | 9.0% | |
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 011930.KS:
cost_of_equity (12.35%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (1.32) + 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.