2838.TW
Union Bank of Taiwan
Price:  
18.35 
TWD
Volume:  
3,140,234
Taiwan, Province of China | Banks

2838.TW WACC - Weighted Average Cost of Capital

The WACC of Union Bank of Taiwan (2838.TW) is 5.8%.

The Cost of Equity of Union Bank of Taiwan (2838.TW) is 7.25%.
The Cost of Debt of Union Bank of Taiwan (2838.TW) is 5%.

RangeSelected
Cost of equity6.3% - 8.2%7.25%
Tax rate14.9% - 16.2%15.55%
Cost of debt5.0% - 5.0%5%
WACC5.4% - 6.3%5.8%
WACC

2838.TW WACC calculation

CategoryLowHigh
Long-term bond rate2.0%2.5%
Equity market risk premium6.0%7.0%
Adjusted beta0.710.73
Additional risk adjustments0.0%0.5%
Cost of equity6.3%8.2%
Tax rate14.9%16.2%
Debt/Equity ratio
0.850.85
Cost of debt5.0%5.0%
After-tax WACC5.4%6.3%
Selected WACC5.8%

2838.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 2838.TW:

cost_of_equity (7.25%) = risk_free_rate (2.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.71) + 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.