002089.SZ WACC - Weighted Average Cost of Capital

The WACC of New Sea Union Technology Group Co Ltd (002089.SZ) is 6.1%.

The Cost of Equity of New Sea Union Technology Group Co Ltd (002089.SZ) is 10.70%.

The Cost of Debt of New Sea Union Technology Group Co Ltd (002089.SZ) is 5.00%.

	Range	Selected
Cost of equity	7.80% - 13.60%	10.70%
Tax rate	31.50% - 36.80%	34.15%
Cost of debt	5.00% - 5.00%	5.00%
WACC	5.1% - 7.1%	6.1%

WACC

002089.SZ WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.84	1.4

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.80%	13.60%

Tax rate	31.50%	36.80%
Debt/Equity ratio	1.65	1.65
Cost of debt	5.00%	5.00%

After-tax WACC	5.1%	7.1%


Selected WACC	6.1%

002089.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 002089.SZ:

cost_of_equity (10.70%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.84) + 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.