The WACC of TST Group Holding Ltd (4439.TW) is 5.4%.
| Range | Selected | |
| Cost of equity | 4.50% - 6.30% | 5.40% |
| Tax rate | 18.40% - 19.90% | 19.15% |
| Cost of debt | 6.30% - 7.00% | 6.65% |
| WACC | 4.6% - 6.1% | 5.4% |
| Category | Low | High |
| Long-term bond rate | 2.0% | 2.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.41 | 0.47 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 4.50% | 6.30% |
| Tax rate | 18.40% | 19.90% |
| Debt/Equity ratio | 0.32 | 0.32 |
| Cost of debt | 6.30% | 7.00% |
| After-tax WACC | 4.6% | 6.1% |
| Selected WACC | 5.4% | |
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 4439.TW:
cost_of_equity (5.40%) = risk_free_rate (2.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.41) + 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.