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As of today (2026-07-14), CTBC Financial Holding Co's weighted average cost of capital is 10.17%%. CTBC Financial Holding Co's ROIC % is 0.00% (calculated using TTM income statement data).
CTBC Financial Holding Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.
For a comprehensive WACC calculation, please access the WACC Calculator.
CTBC Financial Holding Co (TPE:2891) WACC % Explanation
Because it costs money to raise capital. A firm that generates higher ROIC % than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, CTBC Financial Holding Co's weighted average cost of capital is 10.17%%. CTBC Financial Holding Co's ROIC % is 0.00% (calculated using TTM income statement data).
CTBC Financial Holding Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Be Aware
1. GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding latest one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together.
For companies that report quarterly, GuruFocus combines all of the most recent year's quarterly debt data from the beginning of the year to the year-end and calculates the average.
For companies that report semi-annually, GuruFocus combines all of the most recent year's semi-annual debt data from the start of the year to the year-end and calculates the average.
For companies that report annually, GuruFocus combines the beginning and ending annual debt data from the most recent year and then calculates the average.
2. The WACC formula discussed above does not include Preferred Stock. Please adjust if preferred stock is considered.
3. (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
4. GuruFocus uses the latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
CTBC Financial Holding Co WACC % Competitor Comparison
For the Banks - Regional subindustry, CTBC Financial Holding Co's WACC %, along with its competitors' market caps and WACC % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
CTBC Financial Holding Co WACC % vs Banks Industry
For the Banks industry and Financial Services sector, CTBC Financial Holding Co's WACC % distribution charts can be found below:
* The bar in red indicates where CTBC Financial Holding Co's WACC % falls into.
The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC is commonly referred to as the firm's cost of capital. Generally speaking, a company's assets are financed by debt and equity. WACC is the average of the costs of these sources of financing, each of which is weighted by its respective use in the given situation. By taking a weighted average, we can see how much interest the company has to pay for every dollar it finances.
WACC
=
E
/
(E + D)
*
Cost of Equity
+
D
/
(E + D)
*
Cost of Debt
*
(1 - Tax Rate)
1. Weights:
Generally speaking, a company's assets are financed by debt and equity. We need to calculate the weight of equity and the weight of debt.
The market value of equity (E) is also called "Market Cap". As of today, CTBC Financial Holding Co's market capitalization (E) is NT$1278998.395 Mil.
The market value of debt is typically difficult to calculate, therefore, GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding the latest one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together. As of Dec. 2025, CTBC Financial Holding Co's latest one-year quarterly average Book Value of Debt (D) is NT$260778.1234 Mil.
a) weight of equity = E / (E + D) = 1278998.395 / (1278998.395 + 260778.1234) = 0.8306
b) weight of debt = D / (E + D) = 260778.1234 / (1278998.395 + 260778.1234) = 0.1694
2. Cost of Equity:
GuruFocus uses Capital Asset Pricing Model (CAPM) to calculate the required rate of return. The formula is:
Cost of Equity = Risk-Free Rate of Return + Beta of Asset * (Expected Return of the Market - Risk-Free Rate of Return)
a) GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate. It is updated daily. The current risk-free rate is 4.587%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default.
b) Beta is the sensitivity of the expected excess asset returns to the expected excess market returns. CTBC Financial Holding Co's beta is 0.0562.
c) (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
Cost of Equity = 4.587% + 0.0562 * 6% = 4.9242%
3. Cost of Debt:
GuruFocus uses latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.
As of Dec. 2025, CTBC Financial Holding Co's interest expense (positive number) was NT$104858.205 Mil. Its total Book Value of Debt (D) is NT$260778.1234 Mil.
Cost of Debt = 104858.205 / 260778.1234 = 40.2097%.
4. Multiply by one minus TTM Tax Rate:
GuruFocus uses the most recent TTM Tax Expense divided by the most recent TTM Pre-Tax Income to calculate the tax rate. The calculated TTM tax rate is limited to between 0% and 100%. If the calculated tax rate is higher than 100%, it is set to 100%. If the calculated tax rate is less than 0%, it is set to 0%.
The latest calculated TTM Tax Rate = 9891.465 / 92220.308 = 10.73%.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
CTBC Financial Holding Co (TPE:2891) has a WACC % of 10.17% as of Jul. 14, 2026. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on CTBC Financial Holding Co and its competitors. This is near median its historical median of 9.57. Over the past decade, CTBC Financial Holding Co's WACC % has ranged from 6.55 to 16.54. According to the industry distribution chart, CTBC Financial Holding Co ranks #462 out of 1546 companies in the Banks industry, placing it in the top 29.9%.
Is CTBC Financial Holding Co's WACC % too high?
CTBC Financial Holding Co's current WACC % of 10.17% is near median its 10-year median of 9.57. Over the past 10 years, this metric has ranged from a low of 6.55 to a high of 16.54. The Banks industry median WACC % is 13.21. CTBC Financial Holding Co's value of 10.17% is 23% below this industry median. Based on the distribution chart, CTBC Financial Holding Co ranks #462 out of 1546 companies in the Banks industry, which is above the industry midpoint. Overall, CTBC Financial Holding Co has a GF Score™ of 70/100 and is considered Modestly Overvalued, reflecting its overall financial health beyond just this single metric.
How does CTBC Financial Holding Co's WACC % compare to competitors?
According to the Banks industry distribution chart, CTBC Financial Holding Co ranks #462 out of 1546 companies for WACC %. This puts CTBC Financial Holding Co in the upper half of its industry. The industry median WACC % is 13.21. CTBC Financial Holding Co's value of 10.17% is 23% below this benchmark. Historically, CTBC Financial Holding Co's own WACC % has ranged from 6.55 to 16.54 over the past decade. While the company's 10-year median is 9.57 vs. the industry median of 13.21, CTBC Financial Holding Co has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good WACC % for a Banks company?
The median WACC % among Banks companies is 13.21, based on 1,546 companies in the industry. Companies in the top quartile (top 25%) have a WACC % significantly above this median, while those in the bottom quartile fall well below. However, WACC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. CTBC Financial Holding Co's current WACC % of 10.17% is 23% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high WACC % mean?
A high WACC % can signal that a stock is expensive relative to its fundamentals. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on CTBC Financial Holding Co and its competitors. For the Banks industry, the median WACC % is 13.21 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. CTBC Financial Holding Co's current WACC % is 10.17%, which is near median its own 10-year median of 9.57. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is CTBC Financial Holding Co stock overvalued right now?
Based on GuruFocus' analysis, CTBC Financial Holding Co (TPE:2891) is currently considered Modestly Overvalued. The stock's GF Value™ is NT$55.16, compared to a current price of NT$65.00 — trading 17.8% above its estimated fair value. The current WACC % is 10.17%, which is near median its 10-year median of 9.57 and 23% below the Banks industry median of 13.21. CTBC Financial Holding Co's overall GF Score™ is 70/100 with 7 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is WACC % calculated?
WACC % is calculated from a company's financial statements. For CTBC Financial Holding Co (TPE:2891), the current WACC % is 10.17% as of Jul. 14, 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is CTBC Financial Holding Co (TPE:2891) Overvalued in 2026?
Based on GuruFocus' analysis, CTBC Financial Holding Co stock appears to be overvalued.
The current stock price of NT$65.00 is trading 17.8% above its estimated GF Value™ of NT$55.16.
GuruFocus considers CTBC Financial Holding Co to be Modestly Overvalued.
Key valuation signals for TPE:2891:
WACC %: 10.17% (near median its 10-year median of 9.57)
GF Value™: NT$55.16 vs. price of NT$65.00 (17.8% above fair value)
Industry Position: 23% below the Banks median (#462 of 1546)
No single metric tells the full story. See the TPE:2891 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
CTBC Financial Holding Co Ltd is a diversified financial services holding company. Along with its subsidiaries, it operates in the following segments: Life insurance, which generates maximum revenue, Institutional banking, Retail banking, and Others. The majority of the Group's revenue is derived from its Institutional and Retail banking businesses, which include commercial banking and capital market activities, financing activities, deposit products, wealth management, credit cards, secured loans, and unsecured individual loans, etc., catering to individual and institutional clients. Geographically, the Group generates maximum revenue from its business in Taiwan, followed by Asia (excluding Taiwan), and North America.
70GF Score
Get the complete analysis for TPE:2891
WACC % is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
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