The WACC of AJ Networks Co Ltd (095570.KS) is 6.7%.
| Range | Selected | |
| Cost of equity | 9.30% - 16.30% | 12.80% |
| Tax rate | 38.10% - 44.30% | 41.20% |
| Cost of debt | 5.00% - 14.90% | 9.95% |
| WACC | 3.9% - 9.4% | 6.7% |
| Category | Low | High |
| Long-term bond rate | 3.1% | 3.6% |
| Equity market risk premium | 5.8% | 6.8% |
| Adjusted beta | 1.06 | 1.8 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.30% | 16.30% |
| Tax rate | 38.10% | 44.30% |
| Debt/Equity ratio | 6.01 | 6.01 |
| Cost of debt | 5.00% | 14.90% |
| After-tax WACC | 3.9% | 9.4% |
| Selected WACC | 6.7% | |
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 095570.KS:
cost_of_equity (12.80%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (1.06) + 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.