4960.TW WACC - Weighted Average Cost of Capital
The WACC of Cheng Mei Materials Technology Corp (4960.TW) is 8.7%.
| Range | Selected | |
| Cost of equity | 8.1% - 12.6% | 10.35% |
| Tax rate | 5.3% - 8.9% | 7.1% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 6.7% - 10.6% | 8.7% |
| Category | Low | High |
| Long-term bond rate | 2.0% | 2.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 1.02 | 1.37 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.1% | 12.6% |
| Tax rate | 5.3% | 8.9% |
| Debt/Equity ratio | 0.48 | 0.48 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 6.7% | 10.6% |
| Selected WACC | 8.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 4960.TW | Cheng Mei Materials Technology Corp | 0.48 | 0.67 | 0.46 |
| 2355.TW | Chin-Poon Industrial Co Ltd | 0.1 | 0.92 | 0.85 |
| 2456.TW | Chilisin Electronics Corp | 0.35 | 1.89 | 1.43 |
| 2486.TW | I-Chiun Precision Industry Co Ltd | 0.22 | 1.73 | 1.44 |
| 3026.TW | Holy Stone Enterprise Co Ltd | 0.25 | 0.44 | 0.36 |
| 3694.TW | AzureWave Technologies Inc | 0.02 | 1.47 | 1.44 |
| 6153.TW | Career Technology MFG Co Ltd | 0.53 | 1.21 | 0.81 |
| 6230.TW | Nidec Chaun Choung Technology Corp | 0.03 | 1.69 | 1.64 |
| 6251.TW | Dynamic Electronics Co Ltd | 0.91 | 1.04 | 0.57 |
| 8215.TW | BenQ Materials Corp | 1.21 | 0.85 | 0.4 |
| Low | High | |
| Unlevered beta | 0.71 | 1.08 |
| Relevered beta | 1.03 | 1.55 |
| Adjusted relevered beta | 1.02 | 1.37 |
4960.TW's CAPM model and how its cost of Equity is calculated
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 4960.TW:
cost_of_equity (10.35%) = risk_free_rate (2.25%) + equity_risk_premium (6.50%) * adjusted_beta (1.02) + 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.