080470.KQ WACC - Weighted Average Cost of Capital

The WACC of Sungchang Autotech Co Ltd (080470.KQ) is 5.2%.

The Cost of Equity of Sungchang Autotech Co Ltd (080470.KQ) is 8.25%.

The Cost of Debt of Sungchang Autotech Co Ltd (080470.KQ) is 4.50%.

	Range	Selected
Cost of equity	6.90% - 9.60%	8.25%
Tax rate	17.50% - 31.10%	24.30%
Cost of debt	4.30% - 4.70%	4.50%
WACC	4.8% - 5.6%	5.2%

WACC

080470.KQ WACC calculation

Category	Low	High

Long-term bond rate	3.1%	3.6%
Equity market risk premium	5.8%	6.8%
Adjusted beta	0.67	0.81

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.90%	9.60%

Tax rate	17.50%	31.10%
Debt/Equity ratio	1.67	1.67
Cost of debt	4.30%	4.70%

After-tax WACC	4.8%	5.6%


Selected WACC	5.2%

080470.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 080470.KQ:

cost_of_equity (8.25%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (0.67) + 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.