015750.KQ WACC - Weighted Average Cost of Capital

The WACC of Sungwoo Hitech Co Ltd (015750.KQ) is 4.5%.

The Cost of Equity of Sungwoo Hitech Co Ltd (015750.KQ) is 9.50%.

The Cost of Debt of Sungwoo Hitech Co Ltd (015750.KQ) is 5.20%.

	Range	Selected
Cost of equity	6.80% - 12.20%	9.50%
Tax rate	35.40% - 39.80%	37.60%
Cost of debt	4.20% - 6.20%	5.20%
WACC	3.5% - 5.5%	4.5%

WACC

015750.KQ WACC calculation

Category	Low	High

Long-term bond rate	3.1%	3.6%
Equity market risk premium	5.8%	6.8%
Adjusted beta	0.64	1.19

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.80%	12.20%

Tax rate	35.40%	39.80%
Debt/Equity ratio	3.82	3.82
Cost of debt	4.20%	6.20%

After-tax WACC	3.5%	5.5%


Selected WACC	4.5%

015750.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 015750.KQ:

cost_of_equity (9.50%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (0.64) + 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.