1603.TW WACC - Weighted Average Cost of Capital
The WACC of China Wire & Cable Co Ltd (1603.TW) is 7.6%.
| Range | Selected | |
| Cost of equity | 7.2% - 10.1% | 8.65% |
| Tax rate | 18.2% - 19.6% | 18.9% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 6.4% - 8.8% | 7.6% |
| Category | Low | High |
| Long-term bond rate | 2.0% | 2.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.86 | 1.01 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.2% | 10.1% |
| Tax rate | 18.2% | 19.6% |
| Debt/Equity ratio | 0.25 | 0.25 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 6.4% | 8.8% |
| Selected WACC | 7.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 1603.TW | China Wire & Cable Co Ltd | 0.25 | 0.73 | 0.61 |
| 1611.TW | China Electric Mfg Corp | 0.16 | 0.71 | 0.63 |
| 1612.TW | Hong Tai Electric Industrial Co Ltd | 0 | 0.86 | 0.86 |
| 1615.TW | Dah San Electric Wire & Cable Corp | 0.12 | 0.45 | 0.41 |
| 1618.TW | Hold-Key Electric Wire & Cable Co Ltd | 0.11 | 1.18 | 1.08 |
| 2420.TW | Zippy Technology Corp | 0.13 | 0.76 | 0.69 |
| 2440.TW | Space Shuttle Hi-Tech Co Ltd | 0.53 | 0.52 | 0.37 |
| 2460.TW | Gem Terminal Industry Co Ltd | 0.81 | 1.37 | 0.83 |
| 6558.TW | SYNergy ScienTech Corp | 0.01 | 1.5 | 1.49 |
| 8103.TW | CviLux Corp | 0.07 | 0.98 | 0.92 |
| Low | High | |
| Unlevered beta | 0.67 | 0.84 |
| Relevered beta | 0.79 | 1.01 |
| Adjusted relevered beta | 0.86 | 1.01 |
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.