189860.KQ WACC - Weighted Average Cost of Capital
The WACC of Seojeon Electric Machinery Co Ltd (189860.KQ) is 9.7%.
| Range | Selected | |
| Cost of equity | 8.5% - 12.0% | 10.25% |
| Tax rate | 6.1% - 11.9% | 9% |
| Cost of debt | 7.0% - 9.2% | 8.1% |
| WACC | 8.1% - 11.2% | 9.7% |
| Category | Low | High |
| Long-term bond rate | 3.1% | 3.6% |
| Equity market risk premium | 5.8% | 6.8% |
| Adjusted beta | 0.92 | 1.16 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.5% | 12.0% |
| Tax rate | 6.1% | 11.9% |
| Debt/Equity ratio | 0.23 | 0.23 |
| Cost of debt | 7.0% | 9.2% |
| After-tax WACC | 8.1% | 11.2% |
| Selected WACC | 9.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 189860.KQ | Seojeon Electric Machinery Co Ltd | 0.23 | 0.64 | 0.53 |
| 001210.KS | Kumho Electric Co Ltd | 0.17 | 1.13 | 0.97 |
| 007610.KS | Seondo Electric Co Ltd | 0.72 | 1.44 | 0.86 |
| 034020.KS | Doosan Heavy Industries & Construction Co Ltd | 0.17 | 1.7 | 1.47 |
| 043200.KQ | Paru Co Ltd | 0.35 | 1.48 | 1.12 |
| 043220.KQ | HLB Power Co Ltd | 0.48 | 0.66 | 0.46 |
| 112610.KS | CS Wind Corp | 0.71 | 0.87 | 0.53 |
| 258610.KQ | EWK Inc | 0.15 | 0.03 | 0.02 |
| 267260.KS | Hyundai Electric & Energy Systems Co Ltd | 0.02 | 1.1 | 1.08 |
| 298040.KS | Hyosung Heavy Industries Corp | 0.13 | 1.3 | 1.16 |
| Low | High | |
| Unlevered beta | 0.73 | 1.01 |
| Relevered beta | 0.88 | 1.24 |
| Adjusted relevered beta | 0.92 | 1.16 |
189860.KQ'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 189860.KQ:
cost_of_equity (10.25%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (0.92) + 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.