The WACC of Hyosung Chemical Corp (298000.KS) is 9.5%.
| Range | Selected | |
| Cost of equity | 76.80% - 99.80% | 88.30% |
| Tax rate | 8.40% - 22.40% | 15.40% |
| Cost of debt | 5.50% - 7.00% | 6.25% |
| WACC | 8.7% - 10.3% | 9.5% |
| Category | Low | High |
| Long-term bond rate | 3.1% | 3.6% |
| Equity market risk premium | 5.8% | 6.8% |
| Adjusted beta | 12.67 | 14.04 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 76.80% | 99.80% |
| Tax rate | 8.40% | 22.40% |
| Debt/Equity ratio | 18.53 | 18.53 |
| Cost of debt | 5.50% | 7.00% |
| After-tax WACC | 8.7% | 10.3% |
| Selected WACC | 9.5% | |
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 298000.KS:
cost_of_equity (88.30%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (12.67) + 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.