2105.TW
Cheng Shin Rubber Ind. Co Ltd
Price:  
39.95 
TWD
Volume:  
7,576,065
Taiwan, Province of China | Auto Components

2105.TW WACC - Weighted Average Cost of Capital

The WACC of Cheng Shin Rubber Ind. Co Ltd (2105.TW) is 6.1%.

The Cost of Equity of Cheng Shin Rubber Ind. Co Ltd (2105.TW) is 7.05%.
The Cost of Debt of Cheng Shin Rubber Ind. Co Ltd (2105.TW) is 4.25%.

RangeSelected
Cost of equity5.7% - 8.4%7.05%
Tax rate26.3% - 27.2%26.75%
Cost of debt4.0% - 4.5%4.25%
WACC5.0% - 7.2%6.1%
WACC

2105.TW WACC calculation

CategoryLowHigh
Long-term bond rate2.0%2.5%
Equity market risk premium6.0%7.0%
Adjusted beta0.610.77
Additional risk adjustments0.0%0.5%
Cost of equity5.7%8.4%
Tax rate26.3%27.2%
Debt/Equity ratio
0.290.29
Cost of debt4.0%4.5%
After-tax WACC5.0%7.2%
Selected WACC6.1%

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.