The WACC of MCNEX Co Ltd (097520.KQ) is 9.0%.
| Range | Selected | |
| Cost of equity | 8.30% - 10.80% | 9.55% |
| Tax rate | 29.00% - 30.30% | 29.65% |
| Cost of debt | 4.20% - 4.50% | 4.35% |
| WACC | 7.8% - 10.1% | 9.0% |
| Category | Low | High |
| Long-term bond rate | 3.5% | 4.0% |
| Equity market risk premium | 5.2% | 6.2% |
| Adjusted beta | 0.92 | 1.01 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.30% | 10.80% |
| Tax rate | 29.00% | 30.30% |
| Debt/Equity ratio | 0.1 | 0.1 |
| Cost of debt | 4.20% | 4.50% |
| After-tax WACC | 7.8% | 10.1% |
| Selected WACC | 9.0% | |
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 097520.KQ:
cost_of_equity (9.55%) = risk_free_rate (3.75%) + equity_risk_premium (5.70%) * adjusted_beta (0.92) + 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.