043340.KQ
Essen Tech Co Ltd
Price:  
518 
KRW
Volume:  
39,847
Korea, Republic of | Machinery

043340.KQ WACC - Weighted Average Cost of Capital

The WACC of Essen Tech Co Ltd (043340.KQ) is 11.6%.

The Cost of Equity of Essen Tech Co Ltd (043340.KQ) is 12.05%.
The Cost of Debt of Essen Tech Co Ltd (043340.KQ) is 12.1%.

RangeSelected
Cost of equity10.3% - 13.8%12.05%
Tax rate4.3% - 9.8%7.05%
Cost of debt4.1% - 20.1%12.1%
WACC7.5% - 15.7%11.6%
WACC

043340.KQ WACC calculation

CategoryLowHigh
Long-term bond rate3.1%3.6%
Equity market risk premium5.8%6.8%
Adjusted beta1.241.42
Additional risk adjustments0.0%0.5%
Cost of equity10.3%13.8%
Tax rate4.3%9.8%
Debt/Equity ratio
0.790.79
Cost of debt4.1%20.1%
After-tax WACC7.5%15.7%
Selected WACC11.6%

043340.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 043340.KQ:

cost_of_equity (12.05%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (1.24) + 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.