038950.KQ
Fine Digital Inc
Price:  
3,460 
KRW
Volume:  
11,250
Korea, Republic of | Communications Equipment

038950.KQ WACC - Weighted Average Cost of Capital

The WACC of Fine Digital Inc (038950.KQ) is 7.9%.

The Cost of Equity of Fine Digital Inc (038950.KQ) is 8.05%.
The Cost of Debt of Fine Digital Inc (038950.KQ) is 5%.

RangeSelected
Cost of equity6.9% - 9.2%8.05%
Tax rate2.5% - 5.3%3.9%
Cost of debt5.0% - 5.0%5%
WACC6.8% - 9.0%7.9%
WACC

038950.KQ WACC calculation

CategoryLowHigh
Long-term bond rate3.1%3.6%
Equity market risk premium5.8%6.8%
Adjusted beta0.650.74
Additional risk adjustments0.0%0.5%
Cost of equity6.9%9.2%
Tax rate2.5%5.3%
Debt/Equity ratio
0.030.03
Cost of debt5.0%5.0%
After-tax WACC6.8%9.0%
Selected WACC7.9%

038950.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 038950.KQ:

cost_of_equity (8.05%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (0.65) + 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.