1713.TW
Cathay Chemical Works Inc
Price:  
54 
TWD
Volume:  
211,980
Taiwan, Province of China | Chemicals

1713.TW WACC - Weighted Average Cost of Capital

The WACC of Cathay Chemical Works Inc (1713.TW) is 7.9%.

The Cost of Equity of Cathay Chemical Works Inc (1713.TW) is 7.9%.
The Cost of Debt of Cathay Chemical Works Inc (1713.TW) is 5%.

RangeSelected
Cost of equity6.8% - 9.0%7.9%
Tax rate0.6% - 1.1%0.85%
Cost of debt5.0% - 5.0%5%
WACC6.8% - 9.0%7.9%
WACC

1713.TW WACC calculation

CategoryLowHigh
Long-term bond rate2.0%2.5%
Equity market risk premium6.0%7.0%
Adjusted beta0.80.85
Additional risk adjustments0.0%0.5%
Cost of equity6.8%9.0%
Tax rate0.6%1.1%
Debt/Equity ratio
00
Cost of debt5.0%5.0%
After-tax WACC6.8%9.0%
Selected WACC7.9%

1713.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 1713.TW:

cost_of_equity (7.90%) = risk_free_rate (2.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.8) + 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.