099410.KQ WACC - Weighted Average Cost of Capital

The WACC of Dongbang Ship Machinery Co Ltd (099410.KQ) is 22.5%.

The Cost of Equity of Dongbang Ship Machinery Co Ltd (099410.KQ) is 7.30%.

The Cost of Debt of Dongbang Ship Machinery Co Ltd (099410.KQ) is 102.20%.

	Range	Selected
Cost of equity	6.10% - 8.50%	7.30%
Tax rate	10.90% - 20.90%	15.90%
Cost of debt	4.00% - 200.40%	102.20%
WACC	5.6% - 39.5%	22.5%

WACC

099410.KQ WACC calculation

Category	Low	High

Long-term bond rate	3.1%	3.6%
Equity market risk premium	5.8%	6.8%
Adjusted beta	0.51	0.65

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.10%	8.50%

Tax rate	10.90%	20.90%
Debt/Equity ratio	0.26	0.26
Cost of debt	4.00%	200.40%

After-tax WACC	5.6%	39.5%


Selected WACC	22.5%

099410.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 099410.KQ:

cost_of_equity (7.30%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (0.51) + 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.