2889.TW WACC - Weighted Average Cost of Capital
The WACC of IBF Financial Holdings Co Ltd (2889.TW) is 9.0%.
| Range | Selected | |
| Cost of equity | 5.7% - 10.1% | 7.9% |
| Tax rate | 20.4% - 21.2% | 20.8% |
| Cost of debt | 4.0% - 19.0% | 11.5% |
| WACC | 3.5% - 14.4% | 9.0% |
| Category | Low | High |
| Long-term bond rate | 2.0% | 2.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.62 | 1.01 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.7% | 10.1% |
| Tax rate | 20.4% | 21.2% |
| Debt/Equity ratio | 7.25 | 7.25 |
| Cost of debt | 4.0% | 19.0% |
| After-tax WACC | 3.5% | 14.4% |
| Selected WACC | 9.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 2889.TW | IBF Financial Holdings Co Ltd | 7.25 | 0.43 | 0.06 |
| 006800.KS | Mirae Asset Daewoo Co Ltd | 13.75 | 0.77 | 0.07 |
| 165.HK | China Everbright Ltd | 4.36 | 1.79 | 0.4 |
| 2820.TW | China Bills Finance Corp | 10.88 | 0.15 | 0.02 |
| 2855.TW | President Securities Corp | 1.7 | 0.76 | 0.32 |
| 530263.BO | Global Capital Markets Ltd | 0 | 0.04 | 0.03 |
| 6005.TW | Capital Securities Corp | 1.88 | 0.59 | 0.24 |
| 952.HK | China Tonghai International Financial Ltd | 0.61 | 0.14 | 0.09 |
| IPC.AX | Imperial Pacific Ltd | 0.01 | -0.24 | -0.24 |
| MOTILALOFS.NS | Motilal Oswal Financial Services Ltd | 0.29 | 1.46 | 1.19 |
| Low | High | |
| Unlevered beta | 0.06 | 0.15 |
| Relevered beta | 0.43 | 1.01 |
| Adjusted relevered beta | 0.62 | 1.01 |
2889.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 2889.TW:
cost_of_equity (7.90%) = 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.