The WACC of Rothwell International Co Ltd (900260.KQ) is 7.8%.
| Range | Selected | |
| Cost of equity | 16.20% - 23.40% | 19.80% |
| Tax rate | 0.40% - 3.10% | 1.75% |
| Cost of debt | 4.30% - 4.60% | 4.45% |
| WACC | 6.9% - 8.7% | 7.8% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 2.23 | 2.8 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 16.20% | 23.40% |
| Tax rate | 0.40% | 3.10% |
| Debt/Equity ratio | 3.51 | 3.51 |
| Cost of debt | 4.30% | 4.60% |
| After-tax WACC | 6.9% | 8.7% |
| Selected WACC | 7.8% | |
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 900260.KQ:
cost_of_equity (19.80%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (2.23) + 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.