The WACC of Incheon City Gas Co Ltd (034590.KS) is 7.1%.
Range | Selected | |
Cost of equity | 6.7% - 8.8% | 7.75% |
Tax rate | 20.9% - 22.1% | 21.5% |
Cost of debt | 4.0% - 4.5% | 4.25% |
WACC | 6.2% - 8.1% | 7.1% |
Category | Low | High |
Long-term bond rate | 3.1% | 3.6% |
Equity market risk premium | 5.8% | 6.8% |
Adjusted beta | 0.63 | 0.7 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.7% | 8.8% |
Tax rate | 20.9% | 22.1% |
Debt/Equity ratio | 0.17 | 0.17 |
Cost of debt | 4.0% | 4.5% |
After-tax WACC | 6.2% | 8.1% |
Selected WACC | 7.1% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
034590.KS | Incheon City Gas Co Ltd | 0.17 | 0.07 | 0.06 |
000593.SZ | Sichuan Datong Gas Development Co Ltd | 0.36 | 0.93 | 0.73 |
003480.KS | Hanjin Heavy Ind & Const Holdings Co Ltd | 5.15 | 0.41 | 0.08 |
015350.KS | Busan City Gas Co Ltd | 0 | 0.37 | 0.37 |
016710.KS | Daesung Holdings Co Ltd | 1.86 | 0.56 | 0.23 |
053050.KQ | GSE Co Ltd | 0.31 | 0.51 | 0.41 |
117580.KS | Daesung Energy Co Ltd | 0.53 | 0.6 | 0.42 |
603080.SS | Xinjiang Torch Gas Co Ltd | 0.04 | 0.88 | 0.86 |
603706.SS | Xinjiang East Universe Gas Co Ltd | 0.04 | 0.59 | 0.58 |
6828.HK | Beijing Gas Blue Sky Holdings Ltd | 2.79 | 1.83 | 0.57 |
Low | High | |
Unlevered beta | 0.4 | 0.48 |
Relevered beta | 0.45 | 0.55 |
Adjusted relevered beta | 0.63 | 0.7 |
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 034590.KS:
cost_of_equity (7.75%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (0.63) + 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.