The WACC of Xi S&D Inc (317400.KS) is 9.6%.
| Range | Selected | |
| Cost of equity | 6.20% - 10.10% | 8.15% |
| Tax rate | 22.70% - 23.50% | 23.10% |
| Cost of debt | 8.10% - 20.10% | 14.10% |
| WACC | 6.2% - 13.0% | 9.6% |
| Category | Low | High |
| Long-term bond rate | 3.1% | 3.6% |
| Equity market risk premium | 5.8% | 6.8% |
| Adjusted beta | 0.53 | 0.88 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.20% | 10.10% |
| Tax rate | 22.70% | 23.50% |
| Debt/Equity ratio | 1.26 | 1.26 |
| Cost of debt | 8.10% | 20.10% |
| After-tax WACC | 6.2% | 13.0% |
| Selected WACC | 9.6% | |
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 317400.KS:
cost_of_equity (8.15%) = risk_free_rate (3.35%) + equity_risk_premium (6.30%) * adjusted_beta (0.53) + 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.