1718.TW WACC - Weighted Average Cost of Capital

The WACC of China Man-Made Fiber Corp (1718.TW) is 9.3%.

The Cost of Equity of China Man-Made Fiber Corp (1718.TW) is 39.15%.

The Cost of Debt of China Man-Made Fiber Corp (1718.TW) is 11.50%.

	Range	Selected
Cost of equity	10.60% - 67.70%	39.15%
Tax rate	20.70% - 23.90%	22.30%
Cost of debt	4.00% - 19.00%	11.50%
WACC	3.3% - 15.4%	9.3%

WACC

1718.TW WACC calculation

Category	Low	High

Long-term bond rate	2.0%	2.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.43	9.27

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.60%	67.70%

Tax rate	20.70%	23.90%
Debt/Equity ratio	58.88	58.88
Cost of debt	4.00%	19.00%

After-tax WACC	3.3%	15.4%


Selected WACC	9.3%

1718.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 1718.TW:

cost_of_equity (39.15%) = risk_free_rate (2.25%) + equity_risk_premium (6.50%) * adjusted_beta (1.43) + 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.