The WACC of Taeyang Corp (053620.KQ) is 7.5%.
Range | Selected | |
Cost of equity | 6.4% - 8.7% | 7.55% |
Tax rate | 18.9% - 21.7% | 20.3% |
Cost of debt | 4.0% - 4.5% | 4.25% |
WACC | 6.4% - 8.6% | 7.5% |
Category | Low | High |
Long-term bond rate | 3.1% | 3.6% |
Equity market risk premium | 5.8% | 6.8% |
Adjusted beta | 0.58 | 0.67 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.4% | 8.7% |
Tax rate | 18.9% | 21.7% |
Debt/Equity ratio | 0.02 | 0.02 |
Cost of debt | 4.0% | 4.5% |
After-tax WACC | 6.4% | 8.6% |
Selected WACC | 7.5% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
053620.KQ | Taeyang Corp | 0.02 | 0.53 | 0.52 |
000440.KQ | Joong Ang Enervis Co Ltd | 0.02 | 0.38 | 0.38 |
002960.KS | Hankook Shell Oil Co Ltd | 0 | 0.34 | 0.34 |
003650.KS | Michang Oil Ind Co Ltd | 0.27 | 0.14 | 0.12 |
010950.KS | S-Oil Corp | 1.08 | 0.92 | 0.49 |
014200.KQ | Kanglim Co Ltd | 0 | 1.06 | 1.06 |
015710.KQ | Kocom Co Ltd | 0 | 0.54 | 0.54 |
017040.KS | Kwang Myung Electric Co Ltd | 0.24 | 0.98 | 0.83 |
060900.KQ | Daehan Green Power Corp | 0.24 | -0.09 | -0.07 |
137950.KQ | JC Chemical Corp Ltd | 1.71 | 0.61 | 0.26 |
Low | High | |
Unlevered beta | 0.36 | 0.5 |
Relevered beta | 0.37 | 0.51 |
Adjusted relevered beta | 0.58 | 0.67 |
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 053620.KQ:
cost_of_equity (7.55%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (0.58) + 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.