8163.TW WACC - Weighted Average Cost of Capital

The WACC of Darfon Electronics Corp (8163.TW) is 7.3%.

The Cost of Equity of Darfon Electronics Corp (8163.TW) is 10.75%.

The Cost of Debt of Darfon Electronics Corp (8163.TW) is 4.60%.

	Range	Selected
Cost of equity	9.20% - 12.30%	10.75%
Tax rate	21.80% - 25.30%	23.55%
Cost of debt	4.00% - 5.20%	4.60%
WACC	6.3% - 8.3%	7.3%

WACC

8163.TW WACC calculation

Category	Low	High

Long-term bond rate	2.0%	2.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.19	1.33

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.20%	12.30%

Tax rate	21.80%	25.30%
Debt/Equity ratio	0.91	0.91
Cost of debt	4.00%	5.20%

After-tax WACC	6.3%	8.3%


Selected WACC	7.3%

8163.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 8163.TW:

cost_of_equity (10.75%) = risk_free_rate (2.25%) + equity_risk_premium (6.50%) * adjusted_beta (1.19) + 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.