002449.SZ WACC - Weighted Average Cost of Capital

The WACC of Foshan Nationstar Optoelectronics Co Ltd (002449.SZ) is 10.1%.

The Cost of Equity of Foshan Nationstar Optoelectronics Co Ltd (002449.SZ) is 11.30%.

The Cost of Debt of Foshan Nationstar Optoelectronics Co Ltd (002449.SZ) is 5.00%.

	Range	Selected
Cost of equity	9.80% - 12.80%	11.30%
Tax rate	5.80% - 8.40%	7.10%
Cost of debt	5.00% - 5.00%	5.00%
WACC	8.8% - 11.3%	10.1%

WACC

002449.SZ WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	6.1%	7.1%
Adjusted beta	1.16	1.28

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.80%	12.80%

Tax rate	5.80%	8.40%
Debt/Equity ratio	0.23	0.23
Cost of debt	5.00%	5.00%

After-tax WACC	8.8%	11.3%


Selected WACC	10.1%

002449.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 002449.SZ:

cost_of_equity (11.30%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.16) + 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.