The WACC of Yuen Chang Stainless Steel Co Ltd (2069.TW) is 5.1%.
Range | Selected | |
Cost of equity | 6.7% - 9.6% | 8.15% |
Tax rate | 16.4% - 20.3% | 18.35% |
Cost of debt | 4.0% - 4.5% | 4.25% |
WACC | 4.5% - 5.7% | 5.1% |
Category | Low | High |
Long-term bond rate | 2.0% | 2.5% |
Equity market risk premium | 6.0% | 7.0% |
Adjusted beta | 0.78 | 0.94 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.7% | 9.6% |
Tax rate | 16.4% | 20.3% |
Debt/Equity ratio | 1.89 | 1.89 |
Cost of debt | 4.0% | 4.5% |
After-tax WACC | 4.5% | 5.7% |
Selected WACC | 5.1% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
2069.TW | Yuen Chang Stainless Steel Co Ltd | 1.89 | 0.63 | 0.25 |
2007.TW | Yieh Hsing Enterprise Co Ltd | 1.78 | 0.84 | 0.35 |
2017.TW | Quintain Steel Co Ltd | 1.35 | 0.51 | 0.25 |
2020.TW | Mayer Steel Pipe Corp | 0.45 | 0.32 | 0.24 |
2028.TW | Wei Chih Steel Industrial Co Ltd | 0.63 | 0.75 | 0.5 |
2029.TW | Sheng Yu Steel Co Ltd | 0.02 | 0.51 | 0.5 |
2030.TW | Froch Enterprise Co Ltd | 1.53 | 0.62 | 0.28 |
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 |
2038.TW | Hai Kwang Enterprise Corp | 1.62 | 0.87 | 0.38 |
Low | High | |
Unlevered beta | 0.27 | 0.36 |
Relevered beta | 0.67 | 0.91 |
Adjusted relevered beta | 0.78 | 0.94 |
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 2069.TW:
cost_of_equity (8.15%) = risk_free_rate (2.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.78) + 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.