The WACC of Eugene Corp (023410.KQ) is 9.1%.
| Range | Selected | |
| Cost of equity | 7.50% - 10.70% | 9.10% |
| Tax rate | 23.60% - 29.70% | 26.65% |
| Cost of debt | 5.40% - 20.10% | 12.75% |
| WACC | 4.8% - 13.4% | 9.1% |
| Category | Low | High |
| Long-term bond rate | 3.1% | 3.6% |
| Equity market risk premium | 5.8% | 6.8% |
| Adjusted beta | 0.75 | 0.97 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.50% | 10.70% |
| Tax rate | 23.60% | 29.70% |
| Debt/Equity ratio | 3.98 | 3.98 |
| Cost of debt | 5.40% | 20.10% |
| After-tax WACC | 4.8% | 13.4% |
| Selected WACC | 9.1% | |
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 023410.KQ:
cost_of_equity (9.10%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (0.75) + 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.