8101.TW WACC - Weighted Average Cost of Capital
The WACC of Arima Communications Corp (8101.TW) is 6.4%.
| Range | Selected | |
| Cost of equity | 5.1% - 7.9% | 6.5% |
| Tax rate | 0.0% - 2.5% | 1.25% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 5.0% - 7.7% | 6.4% |
| Category | Low | High |
| Long-term bond rate | 2.0% | 2.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.52 | 0.69 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.1% | 7.9% |
| Tax rate | 0.0% | 2.5% |
| Debt/Equity ratio | 0.16 | 0.16 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 5.0% | 7.7% |
| Selected WACC | 6.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 8101.TW | Arima Communications Corp | 0.16 | 0.47 | 0.4 |
| 2365.TW | KYE Systems Corp | 0.03 | 1.23 | 1.19 |
| 2380.TW | Avision Inc | 0.99 | 0.47 | 0.24 |
| 2443.TW | Lead Data Inc | 0.01 | -0.68 | -0.67 |
| 3011.TW | Ji-Haw Industrial Co Ltd | 0.59 | 0.88 | 0.55 |
| 3046.TW | AOPEN Inc | 0.03 | 0.74 | 0.72 |
| 6117.TW | In Win Development Inc | 0.18 | 0.86 | 0.73 |
| 6172.TW | Billionton Systems Inc | 0.25 | 0.31 | 0.25 |
| 6277.TW | Aten International Co Ltd | 0.07 | 0.19 | 0.18 |
| 9912.TW | Associated Industries China Inc | 0.45 | 0.34 | 0.24 |
| Low | High | |
| Unlevered beta | 0.24 | 0.46 |
| Relevered beta | 0.28 | 0.54 |
| Adjusted relevered beta | 0.52 | 0.69 |
8101.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 8101.TW:
cost_of_equity (6.50%) = risk_free_rate (2.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.52) + 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.