260660.KQ WACC - Weighted Average Cost of Capital
The WACC of Korea Arlico Pharm Co Ltd (260660.KQ) is 7.3%.
| Range | Selected | |
| Cost of equity | 6.7% - 8.8% | 7.75% |
| Tax rate | 12.0% - 12.5% | 12.25% |
| Cost of debt | 5.9% - 7.0% | 6.45% |
| WACC | 6.4% - 8.2% | 7.3% |
| Category | Low | High |
| Long-term bond rate | 3.1% | 3.6% |
| Equity market risk premium | 5.8% | 6.8% |
| Adjusted beta | 0.62 | 0.69 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.7% | 8.8% |
| Tax rate | 12.0% | 12.5% |
| Debt/Equity ratio | 0.27 | 0.27 |
| Cost of debt | 5.9% | 7.0% |
| After-tax WACC | 6.4% | 8.2% |
| Selected WACC | 7.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 260660.KQ | Korea Arlico Pharm Co Ltd | 0.27 | 0.37 | 0.3 |
| 000220.KS | Yuyu Pharma Inc | 0.38 | 0.3 | 0.22 |
| 000520.KS | Samil Pharmaceutical Co Ltd | 0.57 | 0.81 | 0.54 |
| 002720.KS | Kukje Pharma Co Ltd | 0.31 | 0.22 | 0.18 |
| 004720.KS | Wooridul Pharmaceutical Ltd | 0.54 | 0.57 | 0.38 |
| 017180.KS | Myungmoon Pharm Co Ltd | 1.55 | 0.44 | 0.19 |
| 054670.KQ | Daehan New Pharm Co Ltd | 0.61 | 0.66 | 0.43 |
| 060590.KQ | CTC Bio Inc | 0.23 | 0.53 | 0.44 |
| 067080.KQ | Dae Hwa Pharm Co Ltd | 0.36 | 1.47 | 1.11 |
| 067290.KQ | JW Shinyak Corp | 0.16 | 0.51 | 0.44 |
| Low | High | |
| Unlevered beta | 0.35 | 0.43 |
| Relevered beta | 0.43 | 0.54 |
| Adjusted relevered beta | 0.62 | 0.69 |
260660.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 260660.KQ:
cost_of_equity (7.75%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (0.62) + 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.