203650.KQ WACC - Weighted Average Cost of Capital

The WACC of Dream Security Co Ltd (203650.KQ) is 12.3%.

The Cost of Equity of Dream Security Co Ltd (203650.KQ) is 12.15%.

The Cost of Debt of Dream Security Co Ltd (203650.KQ) is 14.20%.

	Range	Selected
Cost of equity	9.70% - 14.60%	12.15%
Tax rate	10.80% - 13.80%	12.30%
Cost of debt	11.60% - 16.80%	14.20%
WACC	10.1% - 14.5%	12.3%

WACC

203650.KQ WACC calculation

Category	Low	High

Long-term bond rate	3.1%	3.6%
Equity market risk premium	5.8%	6.8%
Adjusted beta	1.14	1.54

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.70%	14.60%

Tax rate	10.80%	13.80%
Debt/Equity ratio	1.51	1.51
Cost of debt	11.60%	16.80%

After-tax WACC	10.1%	14.5%


Selected WACC	12.3%

203650.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 203650.KQ:

cost_of_equity (12.15%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (1.14) + 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.