099440.KQ
Smec Co Ltd
Price:  
2,170 
KRW
Volume:  
91,259
Korea, Republic of | Machinery

099440.KQ WACC - Weighted Average Cost of Capital

The WACC of Smec Co Ltd (099440.KQ) is 6.5%.

The Cost of Equity of Smec Co Ltd (099440.KQ) is 8.75%.
The Cost of Debt of Smec Co Ltd (099440.KQ) is 4.3%.

RangeSelected
Cost of equity6.4% - 11.1%8.75%
Tax rate6.4% - 7.9%7.15%
Cost of debt4.1% - 4.5%4.3%
WACC5.2% - 7.8%6.5%
WACC

099440.KQ WACC calculation

CategoryLowHigh
Long-term bond rate3.1%3.6%
Equity market risk premium5.8%6.8%
Adjusted beta0.581.03
Additional risk adjustments0.0%0.5%
Cost of equity6.4%11.1%
Tax rate6.4%7.9%
Debt/Equity ratio
0.880.88
Cost of debt4.1%4.5%
After-tax WACC5.2%7.8%
Selected WACC6.5%

099440.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 099440.KQ:

cost_of_equity (8.75%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (0.58) + 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.