The WACC of Sunjin Co Ltd (136490.KS) is 5.2%.
| Range | Selected | |
| Cost of equity | 7.60% - 11.70% | 9.65% |
| Tax rate | 37.60% - 43.70% | 40.65% |
| Cost of debt | 4.20% - 5.30% | 4.75% |
| WACC | 4.4% - 6.0% | 5.2% |
| Category | Low | High |
| Long-term bond rate | 3.1% | 3.6% |
| Equity market risk premium | 5.8% | 6.8% |
| Adjusted beta | 0.78 | 1.11 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.60% | 11.70% |
| Tax rate | 37.60% | 43.70% |
| Debt/Equity ratio | 1.86 | 1.86 |
| Cost of debt | 4.20% | 5.30% |
| After-tax WACC | 4.4% | 6.0% |
| Selected WACC | 5.2% | |
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 136490.KS:
cost_of_equity (9.65%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (0.78) + 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.