237690.KQ
ST Pharm Co Ltd
Price:  
88,900 
KRW
Volume:  
170,513
Korea, Republic of | Life Sciences Tools & Services

237690.KQ WACC - Weighted Average Cost of Capital

The WACC of ST Pharm Co Ltd (237690.KQ) is 6.5%.

The Cost of Equity of ST Pharm Co Ltd (237690.KQ) is 6.65%.
The Cost of Debt of ST Pharm Co Ltd (237690.KQ) is 4.25%.

RangeSelected
Cost of equity5.8% - 7.5%6.65%
Tax rate23.2% - 24.4%23.8%
Cost of debt4.0% - 4.5%4.25%
WACC5.6% - 7.3%6.5%
WACC

237690.KQ WACC calculation

CategoryLowHigh
Long-term bond rate3.1%3.6%
Equity market risk premium5.8%6.8%
Adjusted beta0.470.51
Additional risk adjustments0.0%0.5%
Cost of equity5.8%7.5%
Tax rate23.2%24.4%
Debt/Equity ratio
0.070.07
Cost of debt4.0%4.5%
After-tax WACC5.6%7.3%
Selected WACC6.5%

237690.KQ'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 237690.KQ:

cost_of_equity (6.65%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (0.47) + 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.