1305.TW WACC - Weighted Average Cost of Capital

The WACC of China General Plastics Corp (1305.TW) is 7.1%.

The Cost of Equity of China General Plastics Corp (1305.TW) is 9.50%.

The Cost of Debt of China General Plastics Corp (1305.TW) is 5.50%.

	Range	Selected
Cost of equity	7.20% - 11.80%	9.50%
Tax rate	17.90% - 19.20%	18.55%
Cost of debt	4.00% - 7.00%	5.50%
WACC	5.4% - 8.9%	7.1%

WACC

1305.TW WACC calculation

Category	Low	High

Long-term bond rate	2.0%	2.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.87	1.26

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.20%	11.80%

Tax rate	17.90%	19.20%
Debt/Equity ratio	0.89	0.89
Cost of debt	4.00%	7.00%

After-tax WACC	5.4%	8.9%


Selected WACC	7.1%

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 (9.50%) = risk_free_rate (2.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.87) + 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.