080720.KQ WACC - Weighted Average Cost of Capital
The WACC of Union Korea Pharm Co Ltd (080720.KQ) is 5.4%.
| Range | Selected | |
| Cost of equity | 6.5% - 8.7% | 7.6% |
| Tax rate | 23.1% - 24.4% | 23.75% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 4.3% - 6.6% | 5.4% |
| Category | Low | High |
| Long-term bond rate | 3.1% | 3.6% |
| Equity market risk premium | 5.8% | 6.8% |
| Adjusted beta | 0.59 | 0.68 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.5% | 8.7% |
| Tax rate | 23.1% | 24.4% |
| Debt/Equity ratio | 1.72 | 1.72 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 4.3% | 6.6% |
| Selected WACC | 5.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 080720.KQ | Union Korea Pharm Co Ltd | 1.11 | 0.37 | 0.2 |
| 002210.KS | Dongsung Pharmaceutical Co Ltd | 0.72 | -0.25 | -0.16 |
| 002720.KS | Kukje Pharma Co Ltd | 0.31 | 0.22 | 0.18 |
| 007370.KQ | Jin Yang Pharmaceutical Co Ltd | 0.99 | 0.78 | 0.44 |
| 009300.KQ | Sam-A Pharm Co Ltd | 0.12 | 0.05 | 0.05 |
| 014570.KQ | Korean Drug Co Ltd | 0 | 0.48 | 0.48 |
| 018680.KQ | Seoul Pharma Co Ltd | 0.43 | 0.01 | 0.01 |
| 041910.KQ | EstechPharma Co Ltd | 0.01 | 1.33 | 1.33 |
| 106190.KQ | High Tech Pharm Co Ltd | 0.06 | 0.31 | 0.29 |
| 200780.KQ | BCWorldPharm Co Ltd | 1.89 | 0.42 | 0.17 |
| Low | High | |
| Unlevered beta | 0.18 | 0.24 |
| Relevered beta | 0.39 | 0.52 |
| Adjusted relevered beta | 0.59 | 0.68 |
080720.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 080720.KQ:
cost_of_equity (7.60%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (0.59) + 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.