The WACC of Daedong Metals Co Ltd (020400.KQ) is 7.5%.
Range | Selected | |
Cost of equity | 8.7% - 13.0% | 10.85% |
Tax rate | 16.4% - 18.5% | 17.45% |
Cost of debt | 4.0% - 7.0% | 5.5% |
WACC | 5.9% - 9.1% | 7.5% |
Category | Low | High |
Long-term bond rate | 3.1% | 3.6% |
Equity market risk premium | 5.8% | 6.8% |
Adjusted beta | 0.97 | 1.31 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 8.7% | 13.0% |
Tax rate | 16.4% | 18.5% |
Debt/Equity ratio | 1.13 | 1.13 |
Cost of debt | 4.0% | 7.0% |
After-tax WACC | 5.9% | 9.1% |
Selected WACC | 7.5% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
020400.KQ | Daedong Metals Co Ltd | 1.13 | 0.88 | 0.46 |
006660.KS | Samsung Climate Control Co Ltd | 0.02 | 0.76 | 0.75 |
008830.KQ | DaedongGear | 0.58 | 1.13 | 0.76 |
010580.KS | Jico Co Ltd | 0.02 | 0.42 | 0.41 |
015260.KS | Automobile & PCB | 2.02 | 1.01 | 0.38 |
090150.KQ | Kwangjin Wintec Co Ltd | 2 | 0.43 | 0.16 |
113810.KQ | Dgenx Co Ltd | 0.48 | 1.49 | 1.07 |
130740.KQ | TPC Co Ltd | 0.43 | 0.7 | 0.51 |
212560.KQ | Neooto Co Ltd | 0.39 | 1.37 | 1.04 |
234100.KQ | Sewon Co Ltd | 0.07 | 1.08 | 1.02 |
Low | High | |
Unlevered beta | 0.49 | 0.76 |
Relevered beta | 0.96 | 1.46 |
Adjusted relevered beta | 0.97 | 1.31 |
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.