6278.TW WACC - Weighted Average Cost of Capital
The WACC of Taiwan Surface Mounting Technology Corp (6278.TW) is 7.6%.
| Range | Selected | |
| Cost of equity | 6.9% - 10.2% | 8.55% |
| Tax rate | 22.3% - 24.5% | 23.4% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 6.2% - 8.9% | 7.6% |
| Category | Low | High |
| Long-term bond rate | 2.0% | 2.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.82 | 1.03 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.9% | 10.2% |
| Tax rate | 22.3% | 24.5% |
| Debt/Equity ratio | 0.23 | 0.23 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 6.2% | 8.9% |
| Selected WACC | 7.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 6278.TW | Taiwan Surface Mounting Technology Corp | 0.23 | 1 | 0.85 |
| 2337.TW | Macronix International Co Ltd | 0.66 | 0.84 | 0.56 |
| 2393.TW | Everlight Electronics Co Ltd | 0.03 | 0.68 | 0.66 |
| 2449.TW | King Yuan Electronics Co Ltd | 0.18 | 1.52 | 1.34 |
| 3006.TW | Elite Semiconductor Memory Technology Inc | 0.25 | 1.12 | 0.94 |
| 3189.TW | Kinsus Interconnect Technology Corp | 0.51 | 1.45 | 1.04 |
| 3576.TW | United Renewable Energy Co Ltd | 0.9 | 0.7 | 0.42 |
| 4919.TW | Nuvoton Technology Corp | 0.11 | 1.08 | 1 |
| 6176.TW | Radiant Opto-Electronics Corp | 0.06 | 0.31 | 0.3 |
| 8150.TW | ChipMOS Technologies Inc | 0.73 | 0.7 | 0.45 |
| Low | High | |
| Unlevered beta | 0.62 | 0.89 |
| Relevered beta | 0.73 | 1.04 |
| Adjusted relevered beta | 0.82 | 1.03 |
6278.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 6278.TW:
cost_of_equity (8.55%) = risk_free_rate (2.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.82) + 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.