015350.KS WACC - Weighted Average Cost of Capital
The WACC of Busan City Gas Co Ltd (015350.KS) is 7.1%.
| Range | Selected | |
| Cost of equity | 6.2% - 8.1% | 7.15% |
| Tax rate | 22.5% - 23.1% | 22.8% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.2% - 8.1% | 7.1% |
| Category | Low | High |
| Long-term bond rate | 3.5% | 4.0% |
| Equity market risk premium | 5.2% | 6.2% |
| Adjusted beta | 0.51 | 0.57 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.2% | 8.1% |
| Tax rate | 22.5% | 23.1% |
| Debt/Equity ratio | 0 | 0 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.2% | 8.1% |
| Selected WACC | 7.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 015350.KS | Busan City Gas Co Ltd | 0 | 0.37 | 0.37 |
| 003480.KS | Hanjin Heavy Ind & Const Holdings Co Ltd | 5.15 | 0.41 | 0.08 |
| 015360.KS | Yesco Holdings Co Ltd | 0.93 | 0.17 | 0.1 |
| 016710.KS | Daesung Holdings Co Ltd | 1.86 | 0.56 | 0.23 |
| 017390.KS | Seoul City Gas Co Ltd | 0.28 | 0.34 | 0.28 |
| 034590.KS | Incheon City Gas Co Ltd | 0.17 | 0.07 | 0.07 |
| 117580.KS | Daesung Energy Co Ltd | 0.53 | 0.6 | 0.43 |
| 267290.KS | Kyungdong City Gas Co Ltd | 0.16 | 0.21 | 0.19 |
| 603053.SS | Chengdu Gas Group Co Ltd | 0.03 | 0.76 | 0.74 |
| 603393.SS | Xinjiang Xintai Natural Gas Co Ltd | 0.39 | 0.71 | 0.55 |
| Low | High | |
| Unlevered beta | 0.21 | 0.31 |
| Relevered beta | 0.27 | 0.36 |
| Adjusted relevered beta | 0.51 | 0.57 |
015350.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 015350.KS:
cost_of_equity (7.15%) = risk_free_rate (3.75%) + equity_risk_premium (5.70%) * adjusted_beta (0.51) + 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.