The WACC of KSS Line Ltd (044450.KS) is 8.6%.
| Range | Selected | |
| Cost of equity | 9.60% - 14.30% | 11.95% |
| Tax rate | 2.30% - 2.80% | 2.55% |
| Cost of debt | 4.90% - 11.60% | 8.25% |
| WACC | 5.5% - 11.7% | 8.6% |
| Category | Low | High |
| Long-term bond rate | 3.1% | 3.6% |
| Equity market risk premium | 5.8% | 6.8% |
| Adjusted beta | 1.12 | 1.5 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.60% | 14.30% |
| Tax rate | 2.30% | 2.80% |
| Debt/Equity ratio | 5.66 | 5.66 |
| Cost of debt | 4.90% | 11.60% |
| After-tax WACC | 5.5% | 11.7% |
| Selected WACC | 8.6% | |
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 044450.KS:
cost_of_equity (11.95%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (1.12) + 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.