The WACC of Global View Co Ltd (3040.TW) is 4.9%.
| Range | Selected | |
| Cost of equity | 5.30% - 7.00% | 6.15% |
| Tax rate | 26.70% - 30.30% | 28.50% |
| Cost of debt | 5.00% - 5.00% | 5.00% |
| WACC | 4.5% - 5.2% | 4.9% |
| Category | Low | High |
| Long-term bond rate | 2.0% | 2.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.54 | 0.57 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.30% | 7.00% |
| Tax rate | 26.70% | 30.30% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.00% | 5.00% |
| After-tax WACC | 4.5% | 5.2% |
| Selected WACC | 4.9% | |
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 3040.TW:
cost_of_equity (6.15%) = risk_free_rate (2.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.54) + 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.