041930.KQ WACC - Weighted Average Cost of Capital
The WACC of Dong-A Hwa Sung Co Ltd (041930.KQ) is 5.6%.
| Range | Selected | |
| Cost of equity | 6.2% - 8.6% | 7.4% |
| Tax rate | 30.1% - 32.1% | 31.1% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.0% - 6.3% | 5.6% |
| Category | Low | High |
| Long-term bond rate | 3.1% | 3.6% |
| Equity market risk premium | 5.8% | 6.8% |
| Adjusted beta | 0.54 | 0.66 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.2% | 8.6% |
| Tax rate | 30.1% | 32.1% |
| Debt/Equity ratio | 0.8 | 0.8 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.0% | 6.3% |
| Selected WACC | 5.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 041930.KQ | Dong-A Hwa Sung Co Ltd | 0.8 | 0.98 | 0.63 |
| 002350.KS | Nexen Tire Corp | 2.63 | 0.63 | 0.22 |
| 004840.KS | DRB Holding Co Ltd | 3.04 | 0.76 | 0.24 |
| 005720.KS | Nexen Corp | 4.93 | 0.27 | 0.06 |
| 013520.KS | Hwaseung Corporation Co Ltd | 5.63 | 0.7 | 0.14 |
| 073240.KS | Kumho Tire Co Inc | 1.61 | 0.92 | 0.43 |
| 122350.KQ | Samkee Corp | 5.69 | 0.8 | 0.16 |
| 161390.KS | Hankook Tire & Technology Co Ltd | 0.37 | 0.73 | 0.58 |
| 163560.KS | DRB Industrial Co Ltd | 0.59 | 0.86 | 0.61 |
| 282690.KS | Dong Ah Tire & Rubber Co Ltd | 0.1 | 0 | 0 |
| Low | High | |
| Unlevered beta | 0.2 | 0.32 |
| Relevered beta | 0.31 | 0.49 |
| Adjusted relevered beta | 0.54 | 0.66 |
041930.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 041930.KQ:
cost_of_equity (7.40%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (0.54) + 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.