023530.KS
Lotte Shopping Co Ltd
Price:  
67,800.00 
KRW
Volume:  
39,849.00
Korea, Republic of | Multiline Retail
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023530.KS WACC - Weighted Average Cost of Capital

The WACC of Lotte Shopping Co Ltd (023530.KS) is 6.1%.

The Cost of Equity of Lotte Shopping Co Ltd (023530.KS) is 17.80%.
The Cost of Debt of Lotte Shopping Co Ltd (023530.KS) is 5.50%.

Range Selected
Cost of equity 9.60% - 26.00% 17.80%
Tax rate 8.00% - 22.40% 15.20%
Cost of debt 4.00% - 7.00% 5.50%
WACC 4.4% - 7.8% 6.1%
WACC

023530.KS WACC calculation

Category Low High
Long-term bond rate 3.1% 3.6%
Equity market risk premium 5.8% 6.8%
Adjusted beta 1.12 3.22
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.60% 26.00%
Tax rate 8.00% 22.40%
Debt/Equity ratio 7.7 7.7
Cost of debt 4.00% 7.00%
After-tax WACC 4.4% 7.8%
Selected WACC 6.1%

023530.KS'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 023530.KS:

cost_of_equity (17.80%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (1.12) + 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.