000070.SZ WACC - Weighted Average Cost of Capital

The WACC of Shenzhen SDG Information Co Ltd (000070.SZ) is 9.6%.

The Cost of Equity of Shenzhen SDG Information Co Ltd (000070.SZ) is 12.90%.

The Cost of Debt of Shenzhen SDG Information Co Ltd (000070.SZ) is 5.00%.

	Range	Selected
Cost of equity	11.30% - 14.50%	12.90%
Tax rate	12.80% - 15.00%	13.90%
Cost of debt	5.00% - 5.00%	5.00%
WACC	8.7% - 10.6%	9.6%

WACC

000070.SZ WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	6.1%	7.1%
Adjusted beta	1.41	1.52

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.30%	14.50%

Tax rate	12.80%	15.00%
Debt/Equity ratio	0.61	0.61
Cost of debt	5.00%	5.00%

After-tax WACC	8.7%	10.6%


Selected WACC	9.6%

000070.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 000070.SZ:

cost_of_equity (12.90%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.41) + 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.