UMCN WACC - Weighted Average Cost of Capital
The WACC of UMC Inc (UMCN) is 7.0%.
| Range | Selected | |
| Cost of equity | 5.4% - 8.5% | 6.95% |
| Tax rate | 3.9% - 6.8% | 5.35% |
| Cost of debt | 7.0% - 10.7% | 8.85% |
| WACC | 5.5% - 8.5% | 7.0% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.34 | 0.65 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.4% | 8.5% |
| Tax rate | 3.9% | 6.8% |
| Debt/Equity ratio | 0.03 | 0.03 |
| Cost of debt | 7.0% | 10.7% |
| After-tax WACC | 5.5% | 8.5% |
| Selected WACC | 7.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| UMCN | UMC Inc | 0.03 | 3.58 | 3.5 |
| BLIS | Treasure & Shipwreck Recovery Inc | 0.3 | 0.15 | 0.12 |
| IZ.V | International Zeolite Corp | 3.63 | -0.63 | -0.14 |
| QSMG | Quest Management Inc | 0.1 | 1.07 | 0.97 |
| VAPR | Vaporbrands International Inc | 0.02 | -1.71 | -1.68 |
| Low | High | |
| Unlevered beta | 0.01 | 0.46 |
| Relevered beta | 0.01 | 0.48 |
| Adjusted relevered beta | 0.34 | 0.65 |
UMCN'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 UMCN:
cost_of_equity (6.95%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.34) + 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.