1305.TW WACC - Weighted Average Cost of Capital
The WACC of China General Plastics Corp (1305.TW) is 6.9%.
| Range | Selected | |
| Cost of equity | 7.2% - 11.6% | 9.4% |
| Tax rate | 17.9% - 19.2% | 18.55% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 5.2% - 8.6% | 6.9% |
| Category | Low | High |
| Long-term bond rate | 2.0% | 2.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.86 | 1.22 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.2% | 11.6% |
| Tax rate | 17.9% | 19.2% |
| Debt/Equity ratio | 1.02 | 1.02 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 5.2% | 8.6% |
| Selected WACC | 6.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 1305.TW | China General Plastics Corp | 1.02 | 0.67 | 0.37 |
| 1309.TW | Taita Chemical Co Ltd | 0.46 | 0.9 | 0.66 |
| 1310.TW | Taiwan Styrene Monomer Corp | 0.33 | 0.55 | 0.43 |
| 1709.TW | Formosan Union Chemical Corp | 0.22 | 0.5 | 0.43 |
| 1710.TW | Oriental Union Chemical Corp | 1.39 | 0.48 | 0.23 |
| 1726.TW | Yung Chi Paint & Varnish Mfg Co Ltd | 0 | 0.17 | 0.17 |
| 1727.TW | Chung Hwa Chemical Industrial Works Ltd | 0.19 | 1.04 | 0.9 |
| 3645.TW | Taimide Tech Inc | 0.2 | 1.82 | 1.56 |
| 4722.TW | Qualipoly Chemical Corp | 0.27 | 1.01 | 0.83 |
| 6582.TW | Shin Foong Specialty and Applied Materials Co Ltd | 0 | 0.98 | 0.97 |
| Low | High | |
| Unlevered beta | 0.43 | 0.72 |
| Relevered beta | 0.79 | 1.33 |
| Adjusted relevered beta | 0.86 | 1.22 |
1305.TW'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 1305.TW:
cost_of_equity (9.40%) = risk_free_rate (2.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.86) + 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.