2330.TW WACC - Weighted Average Cost of Capital
The WACC of Taiwan Semiconductor Manufacturing Co Ltd (2330.TW) is 8.3%.
| Range | Selected | |
| Cost of equity | 7.2% - 9.7% | 8.45% |
| Tax rate | 11.3% - 12.6% | 11.95% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 7.0% - 9.5% | 8.3% |
| Category | Low | High |
| Long-term bond rate | 2.0% | 2.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.86 | 0.95 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.2% | 9.7% |
| Tax rate | 11.3% | 12.6% |
| Debt/Equity ratio | 0.04 | 0.04 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 7.0% | 9.5% |
| Selected WACC | 8.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 2330.TW | Taiwan Semiconductor Manufacturing Co Ltd | 0.04 | 1.28 | 1.24 |
| 2303.TW | United Microelectronics Corp | 0.15 | 0.33 | 0.29 |
| 2337.TW | Macronix International Co Ltd | 0.68 | 0.9 | 0.56 |
| 2344.TW | Winbond Electronics Corp | 0.67 | 1.28 | 0.8 |
| 2379.TW | Realtek Semiconductor Corp | 0.02 | 0.71 | 0.7 |
| 2408.TW | Nanya Technology Corp | 0.22 | 1.73 | 1.44 |
| 2454.TW | MediaTek Inc | 0.01 | 0.87 | 0.86 |
| 3034.TW | Novatek Microelectronics Corp | 0 | 0.37 | 0.37 |
| 3711.TW | ASE Technology Holding Co Ltd | 0.3 | 1.38 | 1.09 |
| 6239.TW | Powertech Technology Inc | 0.19 | 1.11 | 0.95 |
| Low | High | |
| Unlevered beta | 0.76 | 0.9 |
| Relevered beta | 0.79 | 0.93 |
| Adjusted relevered beta | 0.86 | 0.95 |
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.