2712.TW
FarGlory Hotel Co Ltd
Price:  
19.20 
TWD
Volume:  
18,000.00
Taiwan, Province of China | Hotels, Restaurants & Leisure
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2712.TW WACC - Weighted Average Cost of Capital

The WACC of FarGlory Hotel Co Ltd (2712.TW) is 6.4%.

The Cost of Equity of FarGlory Hotel Co Ltd (2712.TW) is 6.35%.
The Cost of Debt of FarGlory Hotel Co Ltd (2712.TW) is 6.85%.

Range Selected
Cost of equity 5.10% - 7.60% 6.35%
Tax rate 2.80% - 8.00% 5.40%
Cost of debt 6.70% - 7.00% 6.85%
WACC 5.4% - 7.3% 6.4%
WACC

2712.TW WACC calculation

Category Low High
Long-term bond rate 2.0% 2.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.42 0.58
Additional risk adjustments 0.5% 1.0%
Cost of equity 5.10% 7.60%
Tax rate 2.80% 8.00%
Debt/Equity ratio 0.28 0.28
Cost of debt 6.70% 7.00%
After-tax WACC 5.4% 7.3%
Selected WACC 6.4%

2712.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 2712.TW:

cost_of_equity (6.35%) = risk_free_rate (2.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.42) + risk_adjustments (0.75%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.