2377.TW
Micro-Star International Co Ltd
Price:  
145.5 
TWD
Volume:  
4,624,069
Taiwan, Province of China | Technology Hardware, Storage & Peripherals

2377.TW WACC - Weighted Average Cost of Capital

The WACC of Micro-Star International Co Ltd (2377.TW) is 8.0%.

The Cost of Equity of Micro-Star International Co Ltd (2377.TW) is 8.05%.
The Cost of Debt of Micro-Star International Co Ltd (2377.TW) is 4.25%.

RangeSelected
Cost of equity6.3% - 9.8%8.05%
Tax rate18.0% - 18.3%18.15%
Cost of debt4.0% - 4.5%4.25%
WACC6.3% - 9.8%8.0%
WACC

2377.TW WACC calculation

CategoryLowHigh
Long-term bond rate2.0%2.5%
Equity market risk premium6.0%7.0%
Adjusted beta0.720.97
Additional risk adjustments0.0%0.5%
Cost of equity6.3%9.8%
Tax rate18.0%18.3%
Debt/Equity ratio
0.010.01
Cost of debt4.0%4.5%
After-tax WACC6.3%9.8%
Selected WACC8.0%

2377.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 2377.TW:

cost_of_equity (8.05%) = risk_free_rate (2.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.72) + 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.