The WACC of CKH Food & Health Ltd (900120.KQ) is 11.6%.
| Range | Selected | |
| Cost of equity | 10.50% - 13.60% | 12.05% |
| Tax rate | 22.10% - 22.30% | 22.20% |
| Cost of debt | 4.00% - 6.50% | 5.25% |
| WACC | 10.1% - 13.1% | 11.6% |
| Category | Low | High |
| Long-term bond rate | 5.9% | 6.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.77 | 0.96 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.50% | 13.60% |
| Tax rate | 22.10% | 22.30% |
| Debt/Equity ratio | 0.06 | 0.06 |
| Cost of debt | 4.00% | 6.50% |
| After-tax WACC | 10.1% | 13.1% |
| Selected WACC | 11.6% | |
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 900120.KQ:
cost_of_equity (12.05%) = risk_free_rate (6.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.77) + 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.