1440.TW WACC - Weighted Average Cost of Capital
The WACC of Tainan Spinning Co Ltd (1440.TW) is 6.7%.
| Range | Selected | |
| Cost of equity | 6.5% - 8.9% | 7.7% |
| Tax rate | 9.8% - 11.5% | 10.65% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 5.4% - 8.0% | 6.7% |
| Category | Low | High |
| Long-term bond rate | 2.0% | 2.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.74 | 0.85 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.5% | 8.9% |
| Tax rate | 9.8% | 11.5% |
| Debt/Equity ratio | 0.55 | 0.55 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 5.4% | 8.0% |
| Selected WACC | 6.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 1440.TW | Tainan Spinning Co Ltd | 0.55 | 0.68 | 0.46 |
| 1325.TW | Universal Inc | 0 | 1.37 | 1.37 |
| 1441.TW | Tah Tong Textile Co Ltd | 0.99 | 1.03 | 0.55 |
| 1444.TW | Lealea Enterprise Co Ltd | 0.79 | 0.19 | 0.11 |
| 1446.TW | Hong Ho Precision Textile Co Ltd | 0.06 | 0.68 | 0.65 |
| 1447.TW | Li Peng Enterprise Co Ltd | 0.96 | 0.33 | 0.18 |
| 1455.TW | Zig Sheng Industrial Co Ltd | 0.71 | 0.39 | 0.24 |
| 4426.TW | Li Cheng Enterprise Co Ltd | 1.04 | 1.14 | 0.59 |
| 6504.TW | Nan Liu Enterprise Co Ltd | 1.25 | 0.72 | 0.34 |
| 9938.TW | Taiwan Paiho Ltd | 0.67 | 0.79 | 0.5 |
| Low | High | |
| Unlevered beta | 0.41 | 0.52 |
| Relevered beta | 0.61 | 0.78 |
| Adjusted relevered beta | 0.74 | 0.85 |
1440.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 1440.TW:
cost_of_equity (7.70%) = risk_free_rate (2.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.74) + 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.