MX WACC - Weighted Average Cost of Capital

The WACC of MagnaChip Semiconductor Corp (MX) is 11.5%.

The Cost of Equity of MagnaChip Semiconductor Corp (MX) is 9.10%.

The Cost of Debt of MagnaChip Semiconductor Corp (MX) is 24.95%.

	Range	Selected
Cost of equity	7.00% - 11.20%	9.10%
Tax rate	23.30% - 36.30%	29.80%
Cost of debt	7.00% - 42.90%	24.95%
WACC	6.5% - 16.6%	11.5%

WACC

MX WACC calculation

Category	Low	High

Long-term bond rate	3.9%	4.4%
Equity market risk premium	4.6%	5.6%
Adjusted beta	0.69	1.12

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.00%	11.20%

Tax rate	23.30%	36.30%
Debt/Equity ratio	0.51	0.51
Cost of debt	7.00%	42.90%

After-tax WACC	6.5%	16.6%


Selected WACC	11.5%

MX'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 MX:

cost_of_equity (9.10%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.69) + 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.