2020.TW WACC - Weighted Average Cost of Capital
The WACC of Mayer Steel Pipe Corp (2020.TW) is 5.7%.
| Range | Selected | |
| Cost of equity | 5.7% - 7.8% | 6.75% |
| Tax rate | 15.3% - 17.3% | 16.3% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 5.0% - 6.5% | 5.7% |
| Category | Low | High |
| Long-term bond rate | 2.0% | 2.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.61 | 0.68 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.7% | 7.8% |
| Tax rate | 15.3% | 17.3% |
| Debt/Equity ratio | 0.45 | 0.45 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 5.0% | 6.5% |
| Selected WACC | 5.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 2020.TW | Mayer Steel Pipe Corp | 0.45 | 0.32 | 0.23 |
| 2007.TW | Yieh Hsing Enterprise Co Ltd | 1.78 | 0.84 | 0.34 |
| 2008.TW | Kao Hsiung Chang Iron & Steel Corp | 0.8 | 0.64 | 0.39 |
| 2017.TW | Quintain Steel Co Ltd | 1.35 | 0.51 | 0.24 |
| 2024.TW | Chih Lien Industrial Co Ltd | 0.3 | 0.54 | 0.43 |
| 2031.TW | Hsin Kuang Steel Co Ltd | 1.21 | 0.5 | 0.25 |
| 2032.TW | Sinkang Industries Co Ltd | 0.02 | 0.74 | 0.73 |
| 2033.TW | Chia Ta World Co Ltd | 0.06 | 0.85 | 0.81 |
| 2038.TW | Hai Kwang Enterprise Corp | 1.62 | 0.87 | 0.37 |
| 2069.TW | Yuen Chang Stainless Steel Co Ltd | 1.89 | 0.63 | 0.24 |
| Low | High | |
| Unlevered beta | 0.3 | 0.38 |
| Relevered beta | 0.42 | 0.52 |
| Adjusted relevered beta | 0.61 | 0.68 |
2020.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 2020.TW:
cost_of_equity (6.75%) = risk_free_rate (2.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.61) + 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.