025880.KQ WACC - Weighted Average Cost of Capital

The WACC of KC Feed Co Ltd (025880.KQ) is 7.7%.

The Cost of Equity of KC Feed Co Ltd (025880.KQ) is 9.80%.

The Cost of Debt of KC Feed Co Ltd (025880.KQ) is 4.25%.

	Range	Selected
Cost of equity	6.90% - 12.70%	9.80%
Tax rate	16.30% - 17.70%	17.00%
Cost of debt	4.00% - 4.50%	4.25%
WACC	5.7% - 9.8%	7.7%

WACC

025880.KQ WACC calculation

Category	Low	High

Long-term bond rate	3.1%	3.6%
Equity market risk premium	5.8%	6.8%
Adjusted beta	0.65	1.27

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.90%	12.70%

Tax rate	16.30%	17.70%
Debt/Equity ratio	0.49	0.49
Cost of debt	4.00%	4.50%

After-tax WACC	5.7%	9.8%


Selected WACC	7.7%

025880.KQ'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 025880.KQ:

cost_of_equity (9.80%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (0.65) + 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.