014570.KQ WACC - Weighted Average Cost of Capital
The WACC of Korean Drug Co Ltd (014570.KQ) is 6.3%.
| Range | Selected | |
| Cost of equity | 5.4% - 7.3% | 6.35% |
| Tax rate | 20.3% - 28.2% | 24.25% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 5.4% - 7.3% | 6.3% |
| Category | Low | High |
| Long-term bond rate | 3.1% | 3.6% |
| Equity market risk premium | 5.8% | 6.8% |
| Adjusted beta | 0.4 | 0.47 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.4% | 7.3% |
| Tax rate | 20.3% | 28.2% |
| Debt/Equity ratio | 0 | 0 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 5.4% | 7.3% |
| Selected WACC | 6.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 014570.KQ | Korean Drug Co Ltd | 0 | 0.39 | 0.39 |
| 002800.KQ | Sinsin Pharmaceutical Co Ltd | 0.51 | 0.15 | 0.1 |
| 012790.KQ | Sinil Pharmaceutical Co Ltd | 0.01 | 0.31 | 0.31 |
| 018680.KQ | Seoul Pharma Co Ltd | 0.41 | -0.17 | -0.13 |
| 034940.KQ | ChoA Pharmaceutical Co Ltd | 0.74 | 0.34 | 0.21 |
| 041910.KQ | EstechPharma Co Ltd | 0.01 | 1.35 | 1.34 |
| 080720.KQ | Union Korea Pharm Co Ltd | 1.11 | 0.37 | 0.2 |
| 106190.KQ | High Tech Pharm Co Ltd | 0.06 | 0.06 | 0.05 |
| 200780.KQ | BCWorldPharm Co Ltd | 2.05 | 0.3 | 0.12 |
| 330350.KQ | Withus Pharmaceutical Co Ltd | 0.23 | 0.04 | 0.03 |
| Low | High | |
| Unlevered beta | 0.11 | 0.2 |
| Relevered beta | 0.1 | 0.21 |
| Adjusted relevered beta | 0.4 | 0.47 |
014570.KQ'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 014570.KQ:
cost_of_equity (6.35%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (0.4) + 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.