The WACC of Sangji Caelum Inc (042940.KQ) is 7.6%.
| Range | Selected | |
| Cost of equity | 5.10% - 8.50% | 6.80% |
| Tax rate | 2.20% - 6.00% | 4.10% |
| Cost of debt | 7.00% - 11.70% | 9.35% |
| WACC | 5.8% - 9.5% | 7.6% |
| Category | Low | High |
| Long-term bond rate | 3.1% | 3.6% |
| Equity market risk premium | 5.8% | 6.8% |
| Adjusted beta | 0.01 | 0.36 |
| Additional risk adjustments | 2.0% | 2.5% |
| Cost of equity | 5.10% | 8.50% |
| Tax rate | 2.20% | 6.00% |
| Debt/Equity ratio | 0.63 | 0.63 |
| Cost of debt | 7.00% | 11.70% |
| After-tax WACC | 5.8% | 9.5% |
| Selected WACC | 7.6% | |
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 042940.KQ:
cost_of_equity (6.80%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (0.01) + risk_adjustments (2.25%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.