The WACC of Mirae Technology Co Ltd (213090.KQ) is 8.8%.
| Range | Selected | |
| Cost of equity | 7.70% - 10.40% | 9.05% |
| Tax rate | 21.40% - 22.00% | 21.70% |
| Cost of debt | 7.00% - 7.00% | 7.00% |
| WACC | 7.5% - 10.1% | 8.8% |
| Category | Low | High |
| Long-term bond rate | 3.5% | 4.0% |
| Equity market risk premium | 5.2% | 6.2% |
| Adjusted beta | 0.8 | 0.95 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.70% | 10.40% |
| Tax rate | 21.40% | 22.00% |
| Debt/Equity ratio | 0.06 | 0.06 |
| Cost of debt | 7.00% | 7.00% |
| After-tax WACC | 7.5% | 10.1% |
| Selected WACC | 8.8% | |
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 213090.KQ:
cost_of_equity (9.05%) = risk_free_rate (3.75%) + equity_risk_premium (5.70%) * adjusted_beta (0.8) + 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.