1603.TW
China Wire & Cable Co Ltd
Price:  
38.85 
TWD
Volume:  
189,448
Taiwan, Province of China | Electrical Equipment

1603.TW WACC - Weighted Average Cost of Capital

The WACC of China Wire & Cable Co Ltd (1603.TW) is 7.6%.

The Cost of Equity of China Wire & Cable Co Ltd (1603.TW) is 8.65%.
The Cost of Debt of China Wire & Cable Co Ltd (1603.TW) is 4.25%.

RangeSelected
Cost of equity7.2% - 10.1%8.65%
Tax rate18.2% - 19.6%18.9%
Cost of debt4.0% - 4.5%4.25%
WACC6.4% - 8.8%7.6%
WACC

1603.TW WACC calculation

CategoryLowHigh
Long-term bond rate2.0%2.5%
Equity market risk premium6.0%7.0%
Adjusted beta0.861.01
Additional risk adjustments0.0%0.5%
Cost of equity7.2%10.1%
Tax rate18.2%19.6%
Debt/Equity ratio
0.250.25
Cost of debt4.0%4.5%
After-tax WACC6.4%8.8%
Selected WACC7.6%

1603.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 1603.TW:

cost_of_equity (8.65%) = risk_free_rate (2.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.86) + 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.