The WACC of Yulon Motor Co Ltd (2201.TW) is 7.7%.
Range | Selected | |
Cost of equity | 15.0% - 28.7% | 21.85% |
Tax rate | 20.8% - 23.1% | 21.95% |
Cost of debt | 4.0% - 10.5% | 7.25% |
WACC | 4.7% - 10.7% | 7.7% |
Category | Low | High |
Long-term bond rate | 2.0% | 2.5% |
Equity market risk premium | 6.0% | 7.0% |
Adjusted beta | 2.17 | 3.67 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 15.0% | 28.7% |
Tax rate | 20.8% | 23.1% |
Debt/Equity ratio | 6.88 | 6.88 |
Cost of debt | 4.0% | 10.5% |
After-tax WACC | 4.7% | 10.7% |
Selected WACC | 7.7% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
2201.TW | Yulon Motor Co Ltd | 6.88 | 0.84 | 0.13 |
000550.SZ | Jiangling Motors Corp Ltd | 0.12 | 1.31 | 1.2 |
003620.KS | Ssangyong Motor Co Ltd | 0.47 | 0.4 | 0.3 |
2204.TW | China Motor Corp | 0.11 | 0.82 | 0.75 |
600006.SS | DongFeng Automobile Co Ltd | 0.23 | 1.19 | 1.01 |
600733.SS | BAIC BluePark New Energy Technology Co Ltd | 0.48 | 1.63 | 1.18 |
601127.SS | CHONGQING SOKON INDUSTRY GROUP STOCK Co Ltd | 0.2 | 0.95 | 0.82 |
DRBHCOM.KL | DRB-Hicom Bhd | 6.24 | 1.32 | 0.22 |
GAZA.ME | Gaz PAO | 3.3 | -0.02 | -0.01 |
UMW.KL | UMW Holdings Bhd | 0.27 | 0.62 | 0.52 |
Low | High | |
Unlevered beta | 0.43 | 0.78 |
Relevered beta | 2.75 | 4.99 |
Adjusted relevered beta | 2.17 | 3.67 |
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 2201.TW:
cost_of_equity (21.85%) = risk_free_rate (2.25%) + equity_risk_premium (6.50%) * adjusted_beta (2.17) + 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.