The WACC of Powernet Technologies Corp (037030.KQ) is 8.8%.
| Range | Selected | |
| Cost of equity | 15.30% - 22.40% | 18.85% |
| Tax rate | 22.10% - 22.30% | 22.20% |
| Cost of debt | 5.40% - 6.20% | 5.80% |
| WACC | 7.5% - 10.1% | 8.8% |
| Category | Low | High |
| Long-term bond rate | 3.1% | 3.6% |
| Equity market risk premium | 5.8% | 6.8% |
| Adjusted beta | 2.11 | 2.68 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 15.30% | 22.40% |
| Tax rate | 22.10% | 22.30% |
| Debt/Equity ratio | 2.34 | 2.34 |
| Cost of debt | 5.40% | 6.20% |
| After-tax WACC | 7.5% | 10.1% |
| Selected WACC | 8.8% | |
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 037030.KQ:
cost_of_equity (18.85%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (2.11) + 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.