The WACC of Il Dong Pharmaceutical Co Ltd (249420.KS) is 8.6%.
| Range | Selected | |
| Cost of equity | 8.20% - 10.50% | 9.35% |
| Tax rate | 17.60% - 22.60% | 20.10% |
| Cost of debt | 4.00% - 14.90% | 9.45% |
| WACC | 6.3% - 10.9% | 8.6% |
| Category | Low | High |
| Long-term bond rate | 3.1% | 3.6% |
| Equity market risk premium | 5.8% | 6.8% |
| Adjusted beta | 0.88 | 0.94 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.20% | 10.50% |
| Tax rate | 17.60% | 22.60% |
| Debt/Equity ratio | 0.64 | 0.64 |
| Cost of debt | 4.00% | 14.90% |
| After-tax WACC | 6.3% | 10.9% |
| Selected WACC | 8.6% | |
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 249420.KS:
cost_of_equity (9.35%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (0.88) + 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.