The WACC of MagnaChip Semiconductor Corp (MX) is 9.9%.
Range | Selected | |
Cost of equity | 6.9% - 10.1% | 8.5% |
Tax rate | 26.2% - 27.0% | 26.6% |
Cost of debt | 7.0% - 42.4% | 24.7% |
WACC | 6.6% - 13.2% | 9.9% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 4.6% | 5.6% |
Adjusted beta | 0.66 | 0.93 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.9% | 10.1% |
Tax rate | 26.2% | 27.0% |
Debt/Equity ratio | 0.18 | 0.18 |
Cost of debt | 7.0% | 42.4% |
After-tax WACC | 6.6% | 13.2% |
Selected WACC | 9.9% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
MX | MagnaChip Semiconductor Corp | 0.18 | 1.76 | 1.56 |
ASTI | Ascent Solar Technologies Inc | 0 | 1.32 | 1.32 |
DSPG | Dsp Group Inc | 0 | 0.9 | 0.9 |
EMAN | eMagin Corp | 0.09 | 1.49 | 1.39 |
JKS | JinkoSolar Holding Co Ltd | 5.91 | 0.87 | 0.16 |
NPTN | NeoPhotonics Corp | 0.05 | 0.75 | 0.72 |
PTK.V | POET Technologies Inc | 0 | 0.3 | 0.3 |
SEV.V | Spectra7 Microsystems Inc | 6.95 | 0.94 | 0.15 |
SODI | Solitron Devices Inc | 0.12 | -0.02 | -0.02 |
SQNS | Sequans Communications SA | 0.11 | 0.57 | 0.53 |
Low | High | |
Unlevered beta | 0.44 | 0.79 |
Relevered beta | 0.49 | 0.9 |
Adjusted relevered beta | 0.66 | 0.93 |
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 (8.50%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.66) + 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.