2105.TW WACC - Weighted Average Cost of Capital
The WACC of Cheng Shin Rubber Ind. Co Ltd (2105.TW) is 6.1%.
| Range | Selected | |
| Cost of equity | 5.7% - 8.4% | 7.05% |
| Tax rate | 26.3% - 27.2% | 26.75% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 5.0% - 7.2% | 6.1% |
| Category | Low | High |
| Long-term bond rate | 2.0% | 2.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.61 | 0.77 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.7% | 8.4% |
| Tax rate | 26.3% | 27.2% |
| Debt/Equity ratio | 0.29 | 0.29 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 5.0% | 7.2% |
| Selected WACC | 6.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 2105.TW | Cheng Shin Rubber Ind. Co Ltd | 0.29 | -0.18 | -0.15 |
| 2101.TW | Nankang Rubber Tire Corp Ltd | 0.66 | 0.92 | 0.62 |
| 2102.TW | Federal Corp | 0.46 | 0.41 | 0.3 |
| 2106.TW | Kenda Rubber Industrial Co Ltd | 0.92 | 0.37 | 0.22 |
| 2109.TW | Hwa Fong Rubber Ind Co Ltd | 0.38 | 0.39 | 0.3 |
| 2115.TW | Lu Hai Holding Corp | 0.38 | 0.46 | 0.36 |
| 5101.T | Yokohama Rubber Co Ltd | 0.63 | 1.37 | 0.93 |
| 5105.T | Toyo Tire Corp | 0.23 | 1.12 | 0.96 |
| 601058.SS | Sailun Group Co Ltd | 0.31 | 0.59 | 0.48 |
| MRF.NS | MRF Ltd | 0.04 | 1.13 | 1.09 |
| Low | High | |
| Unlevered beta | 0.34 | 0.54 |
| Relevered beta | 0.42 | 0.66 |
| Adjusted relevered beta | 0.61 | 0.77 |
2105.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 2105.TW:
cost_of_equity (7.05%) = 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.