002112.SZ WACC - Weighted Average Cost of Capital

The WACC of San Bian Science& Technology Co Ltd (002112.SZ) is 11.0%.

The Cost of Equity of San Bian Science& Technology Co Ltd (002112.SZ) is 12.70%.

The Cost of Debt of San Bian Science& Technology Co Ltd (002112.SZ) is 5.00%.

	Range	Selected
Cost of equity	11.00% - 14.40%	12.70%
Tax rate	0.60% - 0.80%	0.70%
Cost of debt	5.00% - 5.00%	5.00%
WACC	9.7% - 12.3%	11.0%

WACC

002112.SZ WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	6.1%	7.1%
Adjusted beta	1.36	1.5

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.00%	14.40%

Tax rate	0.60%	0.80%
Debt/Equity ratio	0.27	0.27
Cost of debt	5.00%	5.00%

After-tax WACC	9.7%	12.3%


Selected WACC	11.0%

002112.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 002112.SZ:

cost_of_equity (12.70%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.36) + 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.