The WACC of Eugene Corp (023410.KQ) is 8.3%.
| Range | Selected | |
| Cost of equity | 7.90% - 16.50% | 12.20% |
| Tax rate | 23.60% - 29.70% | 26.65% |
| Cost of debt | 5.40% - 14.90% | 10.15% |
| WACC | 4.9% - 11.7% | 8.3% |
| Category | Low | High |
| Long-term bond rate | 3.1% | 3.6% |
| Equity market risk premium | 5.8% | 6.8% |
| Adjusted beta | 0.83 | 1.82 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.90% | 16.50% |
| Tax rate | 23.60% | 29.70% |
| Debt/Equity ratio | 3.91 | 3.91 |
| Cost of debt | 5.40% | 14.90% |
| After-tax WACC | 4.9% | 11.7% |
| Selected WACC | 8.3% | |
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 (12.20%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (0.83) + 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.