The WACC of KT Submarine Co Ltd (060370.KQ) is 5.8%.
Range | Selected | |
Cost of equity | 3.9% - 7.7% | 5.8% |
Tax rate | 21.0% - 22.1% | 21.55% |
Cost of debt | 4.0% - 5.4% | 4.7% |
WACC | 3.9% - 7.7% | 5.8% |
Category | Low | High |
Long-term bond rate | 3.1% | 3.6% |
Equity market risk premium | 5.8% | 6.8% |
Adjusted beta | 0.15 | 0.53 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 3.9% | 7.7% |
Tax rate | 21.0% | 22.1% |
Debt/Equity ratio | 0 | 0 |
Cost of debt | 4.0% | 5.4% |
After-tax WACC | 3.9% | 7.7% |
Selected WACC | 5.8% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
060370.KQ | KT Submarine Co Ltd | 0 | 1.16 | 1.16 |
001260.KS | Namkwang Engineering & Construction Co Ltd | 0.55 | -0.36 | -0.25 |
001840.KQ | Eehwa Construction | 0.33 | -0.4 | -0.32 |
002410.KS | Bumyang Construction Co Ltd | 1.77 | -1.85 | -0.77 |
025950.KQ | Dongshin Engineering & Construction | 0 | -0.3 | -0.3 |
026150.KQ | Tuksu Engineering & Construction Ltd | 0.34 | 0.35 | 0.28 |
036190.KQ | Geumhwa PSC Co Ltd | 0.28 | 0.67 | 0.55 |
042940.KQ | Sangji Caelum Inc | 0.82 | -1.73 | -1.05 |
054930.KQ | Yooshin Engineering Corp | 0.55 | 0.5 | 0.35 |
226360.KQ | EXT Co Ltd | 0 | 1.11 | 1.1 |
Low | High | |
Unlevered beta | -0.27 | 0.3 |
Relevered beta | -0.27 | 0.3 |
Adjusted relevered beta | 0.15 | 0.53 |
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 060370.KQ:
cost_of_equity (5.80%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (0.15) + 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.