044480.KQ WACC - Weighted Average Cost of Capital

The WACC of Kyung Nam Biopharma Co Ltd (044480.KQ) is 6.5%.

The Cost of Equity of Kyung Nam Biopharma Co Ltd (044480.KQ) is 7.85%.

The Cost of Debt of Kyung Nam Biopharma Co Ltd (044480.KQ) is 5.05%.

	Range	Selected
Cost of equity	6.60% - 9.10%	7.85%
Tax rate	0.30% - 0.80%	0.55%
Cost of debt	4.30% - 5.80%	5.05%
WACC	5.5% - 7.5%	6.5%

WACC

044480.KQ WACC calculation

Category	Low	High

Long-term bond rate	3.1%	3.6%
Equity market risk premium	5.8%	6.8%
Adjusted beta	0.6	0.73

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.60%	9.10%

Tax rate	0.30%	0.80%
Debt/Equity ratio	0.94	0.94
Cost of debt	4.30%	5.80%

After-tax WACC	5.5%	7.5%


Selected WACC	6.5%

044480.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 044480.KQ:

cost_of_equity (7.85%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (0.6) + 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.