5907.TW WACC - Weighted Average Cost of Capital
The WACC of Grand Ocean Retail Group Ltd (5907.TW) is 8.6%.
| Range | Selected | |
| Cost of equity | 5.5% - 8.8% | 7.15% |
| Tax rate | 27.2% - 36.0% | 31.6% |
| Cost of debt | 4.7% - 22.0% | 13.35% |
| WACC | 3.7% - 13.6% | 8.6% |
| Category | Low | High |
| Long-term bond rate | 2.0% | 2.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.58 | 0.82 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.5% | 8.8% |
| Tax rate | 27.2% | 36.0% |
| Debt/Equity ratio | 9.18 | 9.18 |
| Cost of debt | 4.7% | 22.0% |
| After-tax WACC | 3.7% | 13.6% |
| Selected WACC | 8.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 5907.TW | Grand Ocean Retail Group Ltd | 9.18 | 0.66 | 0.1 |
| 006370.KS | Daegu Department Store Co Ltd | 4.16 | 0.01 | 0 |
| 162.HK | Century Ginwa Retail Holdings Ltd | 96.33 | 0.36 | 0.01 |
| 2136.HK | Lifestyle China Group Ltd | 5.3 | 0.3 | 0.07 |
| 2903.TW | Far Eastern Department Stores Ltd | 2.06 | 0.4 | 0.17 |
| 2910.TW | Tonlin Department Store Co Ltd | 0.72 | 0.25 | 0.17 |
| 600306.SS | Shenyang Commercial City Co Ltd | 1.47 | -0.98 | -0.5 |
| 8247.T | Daiwa Co Ltd | 3.34 | 0.11 | 0.04 |
| 97.HK | Henderson Investment Ltd | 2.41 | 0.31 | 0.12 |
| O9E.SI | Parkson Retail Asia Ltd | 1.59 | 0.92 | 0.45 |
| Low | High | |
| Unlevered beta | 0.05 | 0.11 |
| Relevered beta | 0.37 | 0.73 |
| Adjusted relevered beta | 0.58 | 0.82 |
5907.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 5907.TW:
cost_of_equity (7.15%) = risk_free_rate (2.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.58) + 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.