000836.SZ WACC - Weighted Average Cost of Capital

The WACC of Tianjin Futong Information Science & Technology Co Ltd (000836.SZ) is 7.0%.

The Cost of Equity of Tianjin Futong Information Science & Technology Co Ltd (000836.SZ) is 14.10%.

The Cost of Debt of Tianjin Futong Information Science & Technology Co Ltd (000836.SZ) is 5.00%.

	Range	Selected
Cost of equity	11.50% - 16.70%	14.10%
Tax rate	21.70% - 31.80%	26.75%
Cost of debt	5.00% - 5.00%	5.00%
WACC	6.3% - 7.6%	7.0%

WACC

000836.SZ WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	6.1%	7.1%
Adjusted beta	1.44	1.83

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.50%	16.70%

Tax rate	21.70%	31.80%
Debt/Equity ratio	2.17	2.17
Cost of debt	5.00%	5.00%

After-tax WACC	6.3%	7.6%


Selected WACC	7.0%

000836.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 000836.SZ:

cost_of_equity (14.10%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.44) + 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.