018880.KS WACC - Weighted Average Cost of Capital
The WACC of Hanon Systems (018880.KS) is 5.5%.
| Range | Selected | |
| Cost of equity | 6.6% - 10.2% | 8.4% |
| Tax rate | 16.3% - 33.8% | 25.05% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 4.5% - 6.5% | 5.5% |
| Category | Low | High |
| Long-term bond rate | 3.1% | 3.6% |
| Equity market risk premium | 5.8% | 6.8% |
| Adjusted beta | 0.61 | 0.9 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.6% | 10.2% |
| Tax rate | 16.3% | 33.8% |
| Debt/Equity ratio | 1.94 | 1.94 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 4.5% | 6.5% |
| Selected WACC | 5.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 018880.KS | Hanon Systems | 1.94 | 1.01 | 0.39 |
| 002880.KS | Dayou Automotive Seat Technology Co Ltd | 2.78 | 0.17 | 0.05 |
| 005850.KS | SL Corp | 0.22 | 1.38 | 1.18 |
| 007340.KS | DTR Automotive Corporation | 1.63 | 0.16 | 0.07 |
| 007860.KS | Seoyon Co Ltd | 4.44 | 1.04 | 0.23 |
| 011210.KS | Hyundai Wia Corp | 1.08 | 1.33 | 0.71 |
| 015750.KQ | Sungwoo Hitech Co Ltd | 4.13 | 1.33 | 0.31 |
| 067570.KQ | NVH Korea Inc | 7.27 | 0.44 | 0.06 |
| 122690.KQ | Seojin Automotive Co Ltd | 17.05 | 0.84 | 0.06 |
| 204320.KS | Mando Corp | 1.28 | 0.73 | 0.36 |
| Low | High | |
| Unlevered beta | 0.16 | 0.33 |
| Relevered beta | 0.42 | 0.85 |
| Adjusted relevered beta | 0.61 | 0.9 |
018880.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 018880.KS:
cost_of_equity (8.40%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (0.61) + 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.