140520.KQ WACC - Weighted Average Cost of Capital

The WACC of Daechang Steel Co Ltd (140520.KQ) is 6.9%.

The Cost of Equity of Daechang Steel Co Ltd (140520.KQ) is 6.50%.

The Cost of Debt of Daechang Steel Co Ltd (140520.KQ) is 9.45%.

	Range	Selected
Cost of equity	5.60% - 7.40%	6.50%
Tax rate	12.70% - 18.40%	15.55%
Cost of debt	4.00% - 14.90%	9.45%
WACC	5.0% - 8.7%	6.9%

WACC

140520.KQ WACC calculation

Category	Low	High

Long-term bond rate	3.1%	3.6%
Equity market risk premium	5.8%	6.8%
Adjusted beta	0.44	0.48

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.60%	7.40%

Tax rate	12.70%	18.40%
Debt/Equity ratio	0.39	0.39
Cost of debt	4.00%	14.90%

After-tax WACC	5.0%	8.7%


Selected WACC	6.9%

140520.KQ'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 140520.KQ:

cost_of_equity (6.50%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (0.44) + 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.