2633.TW WACC - Weighted Average Cost of Capital
The WACC of Taiwan High Speed Rail Corp (2633.TW) is 7.0%.
| Range | Selected | |
| Cost of equity | 5.2% - 7.3% | 6.25% |
| Tax rate | 13.9% - 17.1% | 15.5% |
| Cost of debt | 4.0% - 13.8% | 8.9% |
| WACC | 4.1% - 9.8% | 7.0% |
| Category | Low | High |
| Long-term bond rate | 2.0% | 2.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.53 | 0.61 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.2% | 7.3% |
| Tax rate | 13.9% | 17.1% |
| Debt/Equity ratio | 1.51 | 1.51 |
| Cost of debt | 4.0% | 13.8% |
| After-tax WACC | 4.1% | 9.8% |
| Selected WACC | 7.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 2633.TW | Taiwan High Speed Rail Corp | 1.51 | 0.27 | 0.12 |
| 000429.SZ | Guangdong Provincial Expressway Development Co Ltd | 0.26 | 0.04 | 0.03 |
| 001965.SZ | China Merchants Expressway Network Technology Holdings Co Ltd | 0.67 | 0.22 | 0.14 |
| 152.HK | Shenzhen International Holdings Ltd | 3.29 | 0.68 | 0.18 |
| 576.HK | Zhejiang Expressway Co Ltd | 2.26 | 0.7 | 0.24 |
| 600350.SS | Shandong Hi-speed Co Ltd | 1.49 | 0.22 | 0.1 |
| 600377.SS | Jiangsu Expressway Co Ltd | 0.44 | 0.13 | 0.1 |
| 600548.SS | Shenzhen Expressway Co Ltd | 1.17 | 0.39 | 0.19 |
| BEM.BK | Bangkok Expressway and Metro PCL | 0.95 | 0.67 | 0.37 |
| JSMR.JK | Jasa Marga (Persero) Tbk PT | 2.04 | 1.04 | 0.38 |
| Low | High | |
| Unlevered beta | 0.13 | 0.19 |
| Relevered beta | 0.3 | 0.42 |
| Adjusted relevered beta | 0.53 | 0.61 |
2633.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 2633.TW:
cost_of_equity (6.25%) = risk_free_rate (2.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.53) + 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.