The WACC of MK Electron (033160.KQ) is 8.0%.
| Range | Selected | |
| Cost of equity | 9.60% - 23.40% | 16.50% |
| Tax rate | 25.60% - 32.20% | 28.90% |
| Cost of debt | 4.20% - 14.90% | 9.55% |
| WACC | 4.0% - 11.9% | 8.0% |
| Category | Low | High |
| Long-term bond rate | 3.1% | 3.6% |
| Equity market risk premium | 5.8% | 6.8% |
| Adjusted beta | 1.11 | 2.84 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.60% | 23.40% |
| Tax rate | 25.60% | 32.20% |
| Debt/Equity ratio | 6.3 | 6.3 |
| Cost of debt | 4.20% | 14.90% |
| After-tax WACC | 4.0% | 11.9% |
| Selected WACC | 8.0% | |
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 033160.KQ:
cost_of_equity (16.50%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (1.11) + 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.