260660.KQ
Korea Arlico Pharm Co Ltd
Price:  
7,460 
KRW
Volume:  
34,325
Korea, Republic of | Pharmaceuticals

260660.KQ WACC - Weighted Average Cost of Capital

The WACC of Korea Arlico Pharm Co Ltd (260660.KQ) is 6.8%.

The Cost of Equity of Korea Arlico Pharm Co Ltd (260660.KQ) is 7.2%.
The Cost of Debt of Korea Arlico Pharm Co Ltd (260660.KQ) is 6.45%.

RangeSelected
Cost of equity6.3% - 8.1%7.2%
Tax rate12.0% - 12.5%12.25%
Cost of debt5.9% - 7.0%6.45%
WACC6.0% - 7.6%6.8%
WACC

260660.KQ WACC calculation

CategoryLowHigh
Long-term bond rate3.1%3.6%
Equity market risk premium5.8%6.8%
Adjusted beta0.550.58
Additional risk adjustments0.0%0.5%
Cost of equity6.3%8.1%
Tax rate12.0%12.5%
Debt/Equity ratio
0.270.27
Cost of debt5.9%7.0%
After-tax WACC6.0%7.6%
Selected WACC6.8%

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 (7.20%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (0.55) + 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.