The WACC of Shinih Enterprise Co Ltd (9944.TW) is 5.6%.
| Range | Selected | |
| Cost of equity | 7.40% - 10.90% | 9.15% |
| Tax rate | 43.90% - 48.50% | 46.20% |
| Cost of debt | 4.00% - 5.20% | 4.60% |
| WACC | 4.6% - 6.5% | 5.6% |
| Category | Low | High |
| Long-term bond rate | 2.0% | 2.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.89 | 1.12 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.40% | 10.90% |
| Tax rate | 43.90% | 48.50% |
| Debt/Equity ratio | 1.15 | 1.15 |
| Cost of debt | 4.00% | 5.20% |
| After-tax WACC | 4.6% | 6.5% |
| Selected WACC | 5.6% | |
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 9944.TW:
cost_of_equity (9.15%) = risk_free_rate (2.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.89) + 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.