The WACC of E-Mart Inc (139480.KS) is 11.4%.
| Range | Selected | |
| Cost of equity | 11.60% - 17.50% | 14.55% |
| Tax rate | 16.40% - 21.70% | 19.05% |
| Cost of debt | 4.00% - 23.10% | 13.55% |
| WACC | 4.7% - 18.0% | 11.4% |
| Category | Low | High |
| Long-term bond rate | 3.1% | 3.6% |
| Equity market risk premium | 5.8% | 6.8% |
| Adjusted beta | 1.47 | 1.96 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 11.60% | 17.50% |
| Tax rate | 16.40% | 21.70% |
| Debt/Equity ratio | 4.95 | 4.95 |
| Cost of debt | 4.00% | 23.10% |
| After-tax WACC | 4.7% | 18.0% |
| Selected WACC | 11.4% | |
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 139480.KS:
cost_of_equity (14.55%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (1.47) + 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.