020400.KQ
Daedong Metals Co Ltd
Price:  
6,030 
KRW
Volume:  
3,256
Korea, Republic of | Auto Components

020400.KQ WACC - Weighted Average Cost of Capital

The WACC of Daedong Metals Co Ltd (020400.KQ) is 7.5%.

The Cost of Equity of Daedong Metals Co Ltd (020400.KQ) is 10.85%.
The Cost of Debt of Daedong Metals Co Ltd (020400.KQ) is 5.5%.

RangeSelected
Cost of equity8.7% - 13.0%10.85%
Tax rate16.4% - 18.5%17.45%
Cost of debt4.0% - 7.0%5.5%
WACC5.9% - 9.1%7.5%
WACC

020400.KQ WACC calculation

CategoryLowHigh
Long-term bond rate3.1%3.6%
Equity market risk premium5.8%6.8%
Adjusted beta0.971.31
Additional risk adjustments0.0%0.5%
Cost of equity8.7%13.0%
Tax rate16.4%18.5%
Debt/Equity ratio
1.131.13
Cost of debt4.0%7.0%
After-tax WACC5.9%9.1%
Selected WACC7.5%

020400.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 020400.KQ:

cost_of_equity (10.85%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (0.97) + 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.