002385.SZ WACC - Weighted Average Cost of Capital

The WACC of Beijing Dabeinong Technology Group Co Ltd (002385.SZ) is 7.3%.

The Cost of Equity of Beijing Dabeinong Technology Group Co Ltd (002385.SZ) is 9.20%.

The Cost of Debt of Beijing Dabeinong Technology Group Co Ltd (002385.SZ) is 5.00%.

	Range	Selected
Cost of equity	7.80% - 10.60%	9.20%
Tax rate	4.70% - 7.50%	6.10%
Cost of debt	5.00% - 5.00%	5.00%
WACC	6.5% - 8.1%	7.3%

WACC

002385.SZ WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.83	0.97

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.80%	10.60%

Tax rate	4.70%	7.50%
Debt/Equity ratio	0.72	0.72
Cost of debt	5.00%	5.00%

After-tax WACC	6.5%	8.1%


Selected WACC	7.3%

002385.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 002385.SZ:

cost_of_equity (9.20%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.83) + 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.