066570.KS
LG Electronics Inc
Price:  
74,100.00 
KRW
Volume:  
837,364.00
Korea, Republic of | Household Durables
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066570.KS WACC - Weighted Average Cost of Capital

The WACC of LG Electronics Inc (066570.KS) is 7.6%.

The Cost of Equity of LG Electronics Inc (066570.KS) is 11.80%.
The Cost of Debt of LG Electronics Inc (066570.KS) is 5.50%.

Range Selected
Cost of equity 9.90% - 13.70% 11.80%
Tax rate 24.90% - 30.40% 27.65%
Cost of debt 4.00% - 7.00% 5.50%
WACC 6.3% - 9.0% 7.6%
WACC

066570.KS WACC calculation

Category Low High
Long-term bond rate 3.1% 3.6%
Equity market risk premium 5.8% 6.8%
Adjusted beta 1.18 1.41
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.90% 13.70%
Tax rate 24.90% 30.40%
Debt/Equity ratio 1.14 1.14
Cost of debt 4.00% 7.00%
After-tax WACC 6.3% 9.0%
Selected WACC 7.6%

066570.KS'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 066570.KS:

cost_of_equity (11.80%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (1.18) + 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.