The WACC of Shenzhen Topband Co Ltd (002139.SZ) is 10.4%.
Range | Selected | |
Cost of equity | 10.1% - 12.8% | 11.45% |
Tax rate | 7.9% - 9.6% | 8.75% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 9.3% - 11.5% | 10.4% |
Category | Low | High |
Long-term bond rate | 2.7% | 3.2% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 1.21 | 1.27 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 10.1% | 12.8% |
Tax rate | 7.9% | 9.6% |
Debt/Equity ratio | 0.17 | 0.17 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 9.3% | 11.5% |
Selected WACC | 10.4% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
002139.SZ | Shenzhen Topband Co Ltd | 0.17 | 1.28 | 1.11 |
000970.SZ | Beijing Zhong Ke San Huan High-Tech Co Ltd | 0.07 | 1.04 | 0.97 |
002036.SZ | LianChuang Electronic Technology Co Ltd | 0.8 | 1.99 | 1.15 |
002106.SZ | Shenzhen Laibao Hi-Tech Co Ltd | 0.01 | 1.5 | 1.49 |
002273.SZ | Zhejiang Crystal-Optech Co Ltd | 0.02 | 0.87 | 0.86 |
002281.SZ | Accelink Technologies Co Ltd | 0.06 | 1.54 | 1.46 |
002402.SZ | Shenzhen H&T Intelligent Control Co Ltd | 0.17 | 0.9 | 0.78 |
002436.SZ | Shenzhen Fastprint Circuit Tech Co Ltd | 0.2 | 1.92 | 1.62 |
002815.SZ | Suntak Technology Co Ltd | 0.21 | 1.47 | 1.23 |
300088.SZ | Wuhu Token Sciences Co Ltd | 0.3 | 1.54 | 1.21 |
Low | High | |
Unlevered beta | 1.13 | 1.22 |
Relevered beta | 1.31 | 1.4 |
Adjusted relevered beta | 1.21 | 1.27 |
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 002139.SZ:
cost_of_equity (11.45%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.21) + 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.