002518.SZ
Shenzhen Kstar Science & Technology Co Ltd
Price:  
22.18 
CNY
Volume:  
8,176,108
China | Electrical Equipment

002518.SZ WACC - Weighted Average Cost of Capital

The WACC of Shenzhen Kstar Science & Technology Co Ltd (002518.SZ) is 10.3%.

The Cost of Equity of Shenzhen Kstar Science & Technology Co Ltd (002518.SZ) is 10.8%.
The Cost of Debt of Shenzhen Kstar Science & Technology Co Ltd (002518.SZ) is 5%.

RangeSelected
Cost of equity9.5% - 12.1%10.8%
Tax rate12.4% - 14.1%13.25%
Cost of debt5.0% - 5.0%5%
WACC9.1% - 11.5%10.3%
WACC

002518.SZ WACC calculation

CategoryLowHigh
Long-term bond rate2.7%3.2%
Equity market risk premium6.1%7.1%
Adjusted beta1.111.18
Additional risk adjustments0.0%0.5%
Cost of equity9.5%12.1%
Tax rate12.4%14.1%
Debt/Equity ratio
0.070.07
Cost of debt5.0%5.0%
After-tax WACC9.1%11.5%
Selected WACC10.3%

002518.SZ WACC - Detailed calculations of Beta

LowHigh
Unlevered beta1.11.19
Relevered beta1.161.27
Adjusted relevered beta1.111.18

002518.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 002518.SZ:

cost_of_equity (10.80%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.11) + 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.