The WACC of Seowon Co Ltd (021050.KS) is 10.2%.
| Range | Selected | |
| Cost of equity | 18.90% - 25.60% | 22.25% |
| Tax rate | 10.40% - 31.60% | 21.00% |
| Cost of debt | 8.10% - 14.90% | 11.50% |
| WACC | 8.5% - 11.9% | 10.2% |
| Category | Low | High |
| Long-term bond rate | 3.1% | 3.6% |
| Equity market risk premium | 5.8% | 6.8% |
| Adjusted beta | 2.71 | 3.15 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 18.90% | 25.60% |
| Tax rate | 10.40% | 31.60% |
| Debt/Equity ratio | 8.07 | 8.07 |
| Cost of debt | 8.10% | 14.90% |
| After-tax WACC | 8.5% | 11.9% |
| Selected WACC | 10.2% | |
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 021050.KS:
cost_of_equity (22.25%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (2.71) + 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.