The WACC of Grand Pacific Petrochemical Corp (1312.TW) is 6.0%.
Range | Selected | |
Cost of equity | 7.7% - 10.5% | 9.1% |
Tax rate | 17.1% - 17.3% | 17.2% |
Cost of debt | 4.0% - 7.0% | 5.5% |
WACC | 4.7% - 7.3% | 6.0% |
Category | Low | High |
Long-term bond rate | 2.0% | 2.5% |
Equity market risk premium | 6.0% | 7.0% |
Adjusted beta | 0.94 | 1.07 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 7.7% | 10.5% |
Tax rate | 17.1% | 17.3% |
Debt/Equity ratio | 2.2 | 2.2 |
Cost of debt | 4.0% | 7.0% |
After-tax WACC | 4.7% | 7.3% |
Selected WACC | 6.0% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
1312.TW | Grand Pacific Petrochemical Corp | 2.2 | 0.32 | 0.11 |
1305.TW | China General Plastics Corp | 1.02 | 0.67 | 0.36 |
1307.TW | San Fang Chemical Industry Co Ltd | 0.26 | 0.85 | 0.7 |
1309.TW | Taita Chemical Co Ltd | 0.46 | 0.9 | 0.65 |
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 | 0.22 |
1714.TW | Ho Tung Chemical Corp | 0.37 | 0.19 | 0.14 |
2103.TW | TSRC Corp | 0.85 | 0.45 | 0.27 |
2104.TW | International CSRC Investment Holdings Co Ltd | 1.27 | 0.76 | 0.37 |
Low | High | |
Unlevered beta | 0.32 | 0.39 |
Relevered beta | 0.91 | 1.1 |
Adjusted relevered beta | 0.94 | 1.07 |
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 1312.TW:
cost_of_equity (9.10%) = risk_free_rate (2.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.94) + 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.