1718.TW WACC - Weighted Average Cost of Capital

The WACC of China Man-Made Fiber Corp (1718.TW) is 6.4%.

The Cost of Equity of China Man-Made Fiber Corp (1718.TW) is 82.25%.

The Cost of Debt of China Man-Made Fiber Corp (1718.TW) is 7.25%.

	Range	Selected
Cost of equity	66.10% - 98.40%	82.25%
Tax rate	19.40% - 23.70%	21.55%
Cost of debt	4.00% - 10.50%	7.25%
WACC	3.8% - 8.9%	6.4%

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	10.72	13.67

Additional risk adjustments	0.0%	0.5%
Cost of equity	66.10%	98.40%

Tax rate	19.40%	23.70%
Debt/Equity ratio	100.54	100.54
Cost of debt	4.00%	10.50%

After-tax WACC	3.8%	8.9%


Selected WACC	6.4%

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 (82.25%) = risk_free_rate (2.25%) + equity_risk_premium (6.50%) * adjusted_beta (10.72) + 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.