The WACC of Philoptics Co Ltd (161580.KQ) is 10.8%.
| Range | Selected | |
| Cost of equity | 11.10% - 14.20% | 12.65% |
| Tax rate | 22.10% - 22.30% | 22.20% |
| Cost of debt | 5.00% - 5.00% | 5.00% |
| WACC | 9.6% - 12.1% | 10.8% |
| Category | Low | High |
| Long-term bond rate | 3.1% | 3.6% |
| Equity market risk premium | 5.8% | 6.8% |
| Adjusted beta | 1.38 | 1.48 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 11.10% | 14.20% |
| Tax rate | 22.10% | 22.30% |
| Debt/Equity ratio | 0.26 | 0.26 |
| Cost of debt | 5.00% | 5.00% |
| After-tax WACC | 9.6% | 12.1% |
| Selected WACC | 10.8% | |
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 161580.KQ:
cost_of_equity (12.65%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (1.38) + 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.