The WACC of Asia Pacific Telecom Co Ltd (3682.TW) is 5.7%.
| Range | Selected | |
| Cost of equity | 4.70% - 7.40% | 6.05% |
| Tax rate | 9.20% - 15.50% | 12.35% |
| Cost of debt | 4.00% - 7.00% | 5.50% |
| WACC | 4.4% - 7.0% | 5.7% |
| Category | Low | High |
| Long-term bond rate | 2.0% | 2.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.37 | 0.55 |
| Additional risk adjustments | 0.5% | 1.0% |
| Cost of equity | 4.70% | 7.40% |
| Tax rate | 9.20% | 15.50% |
| Debt/Equity ratio | 0.37 | 0.37 |
| Cost of debt | 4.00% | 7.00% |
| After-tax WACC | 4.4% | 7.0% |
| Selected WACC | 5.7% | |
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 3682.TW:
cost_of_equity (6.05%) = risk_free_rate (2.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.37) + risk_adjustments (0.75%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.