000657.SZ WACC - Weighted Average Cost of Capital

The WACC of China Tungsten and Hightech Materials Co Ltd (000657.SZ) is 9.8%.

The Cost of Equity of China Tungsten and Hightech Materials Co Ltd (000657.SZ) is 11.00%.

The Cost of Debt of China Tungsten and Hightech Materials Co Ltd (000657.SZ) is 5.00%.

	Range	Selected
Cost of equity	9.50% - 12.50%	11.00%
Tax rate	11.40% - 11.90%	11.65%
Cost of debt	5.00% - 5.00%	5.00%
WACC	8.6% - 11.0%	9.8%

WACC

000657.SZ WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	6.1%	7.1%
Adjusted beta	1.11	1.23

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.50%	12.50%

Tax rate	11.40%	11.90%
Debt/Equity ratio	0.22	0.22
Cost of debt	5.00%	5.00%

After-tax WACC	8.6%	11.0%


Selected WACC	9.8%

000657.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 000657.SZ:

cost_of_equity (11.00%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.11) + 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.