000032.SZ WACC - Weighted Average Cost of Capital
The WACC of Shenzhen Sed Industry Co Ltd (000032.SZ) is 8.3%.
| Range | Selected | |
| Cost of equity | 10.6% - 14.0% | 12.3% |
| Tax rate | 32.0% - 34.4% | 33.2% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 7.4% - 9.3% | 8.3% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1.29 | 1.44 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.6% | 14.0% |
| Tax rate | 32.0% | 34.4% |
| Debt/Equity ratio | 0.79 | 0.79 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 7.4% | 9.3% |
| Selected WACC | 8.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 000032.SZ | Shenzhen Sed Industry Co Ltd | 0.79 | 1.49 | 0.98 |
| 000536.SZ | CPT Technology Group Co Ltd | 0.26 | 0.84 | 0.72 |
| 002658.SZ | Beijing SDL Technology Co Ltd | 0 | 0.89 | 0.89 |
| 002960.SZ | Jade Bird Fire Co Ltd | 0.11 | 1.66 | 1.55 |
| 002980.SZ | Shenzhen Everbest Machinery Industry Co Ltd | 0.03 | 0.87 | 0.85 |
| 300114.SZ | Zhonghang Electronic Measuring Instruments Co Ltd | 0 | 1.23 | 1.23 |
| 300427.SZ | Red Phase INC | 0.02 | 0.47 | 0.46 |
| 603700.SS | Ningbo Water Meter Co Ltd | 0.09 | 1.06 | 1 |
| 688007.SS | Appotronics Corp Ltd | 0.14 | 1.69 | 1.55 |
| 688100.SS | Willfar Information Technology Co Ltd | 0.02 | 1.29 | 1.27 |
| Low | High | |
| Unlevered beta | 0.95 | 1.09 |
| Relevered beta | 1.43 | 1.66 |
| Adjusted relevered beta | 1.29 | 1.44 |
000032.SZ'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 000032.SZ:
cost_of_equity (12.30%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.29) + 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.