027040.KQ WACC - Weighted Average Cost of Capital

The WACC of Seoul Electronics & Telecom (027040.KQ) is 8.4%.

The Cost of Equity of Seoul Electronics & Telecom (027040.KQ) is 16.30%.

The Cost of Debt of Seoul Electronics & Telecom (027040.KQ) is 5.50%.

	Range	Selected
Cost of equity	13.40% - 19.20%	16.30%
Tax rate	6.40% - 42.30%	24.35%
Cost of debt	4.00% - 7.00%	5.50%
WACC	7.2% - 9.5%	8.4%

WACC

027040.KQ WACC calculation

Category	Low	High

Long-term bond rate	3.1%	3.6%
Equity market risk premium	5.8%	6.8%
Adjusted beta	1.77	2.21

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.40%	19.20%

Tax rate	6.40%	42.30%
Debt/Equity ratio	1.77	1.77
Cost of debt	4.00%	7.00%

After-tax WACC	7.2%	9.5%


Selected WACC	8.4%

027040.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 027040.KQ:

cost_of_equity (16.30%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (1.77) + 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.