102120.KQ WACC - Weighted Average Cost of Capital

The WACC of Abov Semiconductor Co Ltd (102120.KQ) is 20.0%.

The Cost of Equity of Abov Semiconductor Co Ltd (102120.KQ) is 8.75%.

The Cost of Debt of Abov Semiconductor Co Ltd (102120.KQ) is 45.65%.

	Range	Selected
Cost of equity	6.10% - 11.40%	8.75%
Tax rate	10.70% - 12.50%	11.60%
Cost of debt	20.10% - 71.20%	45.65%
WACC	10.3% - 29.7%	20.0%

WACC

102120.KQ WACC calculation

Category	Low	High

Long-term bond rate	3.1%	3.6%
Equity market risk premium	5.8%	6.8%
Adjusted beta	0.52	1.07

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.10%	11.40%

Tax rate	10.70%	12.50%
Debt/Equity ratio	0.56	0.56
Cost of debt	20.10%	71.20%

After-tax WACC	10.3%	29.7%


Selected WACC	20.0%

102120.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 102120.KQ:

cost_of_equity (8.75%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (0.52) + 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.