5534.TW WACC - Weighted Average Cost of Capital
The WACC of Chong Hong Construction Co Ltd (5534.TW) is 5.2%.
| Range | Selected | |
| Cost of equity | 5.0% - 8.2% | 6.6% |
| Tax rate | 18.0% - 19.2% | 18.6% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 4.2% - 6.3% | 5.2% |
| Category | Low | High |
| Long-term bond rate | 2.0% | 2.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.49 | 0.75 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.0% | 8.2% |
| Tax rate | 18.0% | 19.2% |
| Debt/Equity ratio | 0.76 | 0.76 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 4.2% | 6.3% |
| Selected WACC | 5.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 5534.TW | Chong Hong Construction Co Ltd | 0.76 | 0.67 | 0.41 |
| 2524.TW | King's Town Construction Co Ltd | 1.15 | 0.27 | 0.14 |
| 2527.TW | Hung Ching Development & Construction Co Ltd | 1.61 | 0.97 | 0.42 |
| 2528.TW | Crowell Development Corp | 1.17 | 0.72 | 0.37 |
| 2545.TW | Huang Hsiang Construction Corp | 2.4 | 1.2 | 0.41 |
| 2547.TW | Radium Life Tech Co Ltd | 3.5 | 0.36 | 0.09 |
| 3366.HK | Overseas Chinese Town (Asia) Holdings Ltd | 59.39 | 1.66 | 0.03 |
| 5525.TW | Sweeten Real Estate Development Co Ltd | 0.82 | 0.75 | 0.45 |
| 8803.T | Heiwa Real Estate Co Ltd | 1.42 | 0.33 | 0.15 |
| UOS.AX | United Overseas Australia Ltd | 0.26 | -0.4 | -0.33 |
| Low | High | |
| Unlevered beta | 0.15 | 0.38 |
| Relevered beta | 0.24 | 0.63 |
| Adjusted relevered beta | 0.49 | 0.75 |
5534.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 5534.TW:
cost_of_equity (6.60%) = risk_free_rate (2.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.49) + 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.