2371.TW WACC - Weighted Average Cost of Capital
The WACC of Tatung Co (2371.TW) is 9.4%.
| Range | Selected | |
| Cost of equity | 10.0% - 12.9% | 11.45% |
| Tax rate | 2.5% - 3.4% | 2.95% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 8.3% - 10.5% | 9.4% |
| Category | Low | High |
| Long-term bond rate | 2.0% | 2.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 1.33 | 1.41 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.0% | 12.9% |
| Tax rate | 2.5% | 3.4% |
| Debt/Equity ratio | 0.38 | 0.38 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 8.3% | 10.5% |
| Selected WACC | 9.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 2371.TW | Tatung Co | 0.38 | 0.68 | 0.5 |
| 002925.SZ | Xiamen Intretech Inc | 0.07 | 1.4 | 1.32 |
| 1604.TW | Sampo Corp | 0.54 | 0.3 | 0.2 |
| 2374.TW | Ability Enterprise Co Ltd | 0.02 | 1.11 | 1.08 |
| 2489.TW | Amtran Technology Co Ltd | 0.07 | 1.17 | 1.1 |
| 300083.SZ | Guangdong Create Century Intelligent Equipment Group Corp Ltd | 0.19 | 1.46 | 1.24 |
| 3059.TW | Altek Corp | 0.26 | 1.01 | 0.81 |
| 5225.TW | Eastech Holding Ltd | 0.02 | 1.16 | 1.14 |
| 6839.T | Funai Electric Co Ltd | 0.01 | 1.87 | 1.85 |
| DIXON.NS | Dixon Technologies (India) Ltd | 0 | 1.43 | 1.43 |
| Low | High | |
| Unlevered beta | 1.09 | 1.18 |
| Relevered beta | 1.49 | 1.61 |
| Adjusted relevered beta | 1.33 | 1.41 |
2371.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 2371.TW:
cost_of_equity (11.45%) = risk_free_rate (2.25%) + equity_risk_premium (6.50%) * adjusted_beta (1.33) + 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.