002528.SZ WACC - Weighted Average Cost of Capital

The WACC of Shenzhen Infinova Ltd (002528.SZ) is 8.5%.

The Cost of Equity of Shenzhen Infinova Ltd (002528.SZ) is 9.85%.

The Cost of Debt of Shenzhen Infinova Ltd (002528.SZ) is 5.00%.

	Range	Selected
Cost of equity	7.50% - 12.20%	9.85%
Tax rate	2.80% - 4.40%	3.60%
Cost of debt	5.00% - 5.00%	5.00%
WACC	6.8% - 10.3%	8.5%

WACC

002528.SZ WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.79	1.2

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.50%	12.20%

Tax rate	2.80%	4.40%
Debt/Equity ratio	0.36	0.36
Cost of debt	5.00%	5.00%

After-tax WACC	6.8%	10.3%


Selected WACC	8.5%

002528.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 002528.SZ:

cost_of_equity (9.85%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.79) + 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.