2002.TW
China Steel Corp
Price:  
19.4 
TWD
Volume:  
31,110,202
Taiwan, Province of China | Metals & Mining

2002.TW WACC - Weighted Average Cost of Capital

The WACC of China Steel Corp (2002.TW) is 5.5%.

The Cost of Equity of China Steel Corp (2002.TW) is 6.45%.
The Cost of Debt of China Steel Corp (2002.TW) is 5.5%.

RangeSelected
Cost of equity5.6% - 7.3%6.45%
Tax rate18.4% - 20.1%19.25%
Cost of debt4.0% - 7.0%5.5%
WACC4.5% - 6.5%5.5%
WACC

2002.TW WACC calculation

CategoryLowHigh
Long-term bond rate2.0%2.5%
Equity market risk premium6.0%7.0%
Adjusted beta0.590.61
Additional risk adjustments0.0%0.5%
Cost of equity5.6%7.3%
Tax rate18.4%20.1%
Debt/Equity ratio
0.90.9
Cost of debt4.0%7.0%
After-tax WACC4.5%6.5%
Selected WACC5.5%

2002.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 2002.TW:

cost_of_equity (6.45%) = risk_free_rate (2.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.59) + 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.