2816.TW WACC - Weighted Average Cost of Capital
The WACC of Union Insurance Co Ltd (2816.TW) is 6.9%.
| Range | Selected | |
| Cost of equity | 5.8% - 8.1% | 6.95% |
| Tax rate | 5.2% - 10.4% | 7.8% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.8% - 8.1% | 6.9% |
| Category | Low | High |
| Long-term bond rate | 2.0% | 2.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.62 | 0.73 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.8% | 8.1% |
| Tax rate | 5.2% | 10.4% |
| Debt/Equity ratio | 0 | 0 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.8% | 8.1% |
| Selected WACC | 6.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 2816.TW | Union Insurance Co Ltd | 0 | 0.63 | 0.62 |
| 2832.TW | Taiwan Fire & Marine Insurance Co Ltd | 0 | 0.48 | 0.47 |
| 2850.TW | Shinkong Insurance Co Ltd | 0 | 0.23 | 0.23 |
| 2852.TW | First Insurance Co Ltd | 0 | 0.59 | 0.59 |
| 8020.SR | Malath Cooperative Insurance Company SJSC | 0 | 1.39 | 1.38 |
| 8270.SR | Buruj Cooperative Insurance Co SJSC | 0 | 1.6 | 1.6 |
| MTI.BK | Muang Thai Insurance PCL | 0.02 | 0.22 | 0.22 |
| SMK.BK | Syn Mun Kong Insurance PCL | 4.27 | 0 | 0 |
| TUGU.JK | Asuransi Tugu Pratama Indonesia Tbk PT | 0.19 | 0.7 | 0.59 |
| TWR.NZ | Tower Ltd | 0.07 | 0.4 | 0.38 |
| Low | High | |
| Unlevered beta | 0.44 | 0.59 |
| Relevered beta | 0.43 | 0.6 |
| Adjusted relevered beta | 0.62 | 0.73 |
2816.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 2816.TW:
cost_of_equity (6.95%) = risk_free_rate (2.25%) + equity_risk_premium (6.50%) * 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.