2330.TW
Taiwan Semiconductor Manufacturing Co Ltd
Price:  
1,130 
TWD
Volume:  
34,513,640
Taiwan, Province of China | Semiconductors & Semiconductor Equipment

2330.TW WACC - Weighted Average Cost of Capital

The WACC of Taiwan Semiconductor Manufacturing Co Ltd (2330.TW) is 8.3%.

The Cost of Equity of Taiwan Semiconductor Manufacturing Co Ltd (2330.TW) is 8.45%.
The Cost of Debt of Taiwan Semiconductor Manufacturing Co Ltd (2330.TW) is 4.25%.

RangeSelected
Cost of equity7.2% - 9.7%8.45%
Tax rate11.3% - 12.6%11.95%
Cost of debt4.0% - 4.5%4.25%
WACC7.0% - 9.5%8.3%
WACC

2330.TW WACC calculation

CategoryLowHigh
Long-term bond rate2.0%2.5%
Equity market risk premium6.0%7.0%
Adjusted beta0.860.95
Additional risk adjustments0.0%0.5%
Cost of equity7.2%9.7%
Tax rate11.3%12.6%
Debt/Equity ratio
0.040.04
Cost of debt4.0%4.5%
After-tax WACC7.0%9.5%
Selected WACC8.3%

2330.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 2330.TW:

cost_of_equity (8.45%) = risk_free_rate (2.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.86) + 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.