1723.TW WACC - Weighted Average Cost of Capital
The WACC of China Steel Chemical Corp (1723.TW) is 7.3%.
| Range | Selected | |
| Cost of equity | 6.6% - 8.7% | 7.65% |
| Tax rate | 16.8% - 16.9% | 16.85% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 6.3% - 8.2% | 7.3% |
| Category | Low | High |
| Long-term bond rate | 2.0% | 2.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.76 | 0.81 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.6% | 8.7% |
| Tax rate | 16.8% | 16.9% |
| Debt/Equity ratio | 0.11 | 0.11 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 6.3% | 8.2% |
| Selected WACC | 7.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 1723.TW | China Steel Chemical Corp | 0.11 | 0.3 | 0.27 |
| 1711.TW | Everlight Chemical Industrial Corp | 0.33 | 0.79 | 0.62 |
| 1773.TW | Shiny Chemical Industrial Co Ltd | 0.11 | 0.62 | 0.56 |
| 1809.TW | China Glaze Co Ltd | 0.28 | 0.89 | 0.72 |
| 3708.TW | Swancor Holding Co Ltd | 0.2 | 0.72 | 0.62 |
| 4720.TW | Tex Year Industries Inc | 0.38 | 0.71 | 0.54 |
| 4739.TW | Coremax Corp | 0.41 | 1.22 | 0.91 |
| 4755.TW | San Fu Chemical Co Ltd | 0.18 | 0.9 | 0.78 |
| 4764.TW | Double Bond Chemical Ind Co Ltd | 0.56 | 0.76 | 0.52 |
| 5234.TW | Daxin Materials Corp | 0.02 | 1.49 | 1.46 |
| Low | High | |
| Unlevered beta | 0.59 | 0.66 |
| Relevered beta | 0.64 | 0.72 |
| Adjusted relevered beta | 0.76 | 0.81 |
1723.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 1723.TW:
cost_of_equity (7.65%) = risk_free_rate (2.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.76) + 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.