102120.KQ WACC - Weighted Average Cost of Capital

The WACC of Abov Semiconductor Co Ltd (102120.KQ) is 18.4%.

The Cost of Equity of Abov Semiconductor Co Ltd (102120.KQ) is 8.50%.

The Cost of Debt of Abov Semiconductor Co Ltd (102120.KQ) is 39.10%.

	Range	Selected
Cost of equity	5.50% - 11.50%	8.50%
Tax rate	10.70% - 12.50%	11.60%
Cost of debt	7.00% - 71.20%	39.10%
WACC	5.8% - 31.0%	18.4%

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	0.41	1.09

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.50%	11.50%

Tax rate	10.70%	12.50%
Debt/Equity ratio	0.62	0.62
Cost of debt	7.00%	71.20%

After-tax WACC	5.8%	31.0%


Selected WACC	18.4%

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 (8.50%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (0.41) + 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.