The WACC of Samil (032280.KQ) is 5.0%.
| Range | Selected | |
| Cost of equity | 4.80% - 6.90% | 5.85% |
| Tax rate | 25.30% - 31.70% | 28.50% |
| Cost of debt | 4.00% - 8.30% | 6.15% |
| WACC | 3.8% - 6.2% | 5.0% |
| Category | Low | High |
| Long-term bond rate | 3.1% | 3.6% |
| Equity market risk premium | 5.8% | 6.8% |
| Adjusted beta | 0.3 | 0.41 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 4.80% | 6.90% |
| Tax rate | 25.30% | 31.70% |
| Debt/Equity ratio | 1.13 | 1.13 |
| Cost of debt | 4.00% | 8.30% |
| After-tax WACC | 3.8% | 6.2% |
| Selected WACC | 5.0% | |
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 032280.KQ:
cost_of_equity (5.85%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (0.3) + 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.