002555.SZ
Wuhu Sanqi Interactive Entertainment Network Technology Group Co Ltd
Price:  
18.55 
CNY
Volume:  
82,235,750
China | Entertainment

002555.SZ WACC - Weighted Average Cost of Capital

The WACC of Wuhu Sanqi Interactive Entertainment Network Technology Group Co Ltd (002555.SZ) is 11.3%.

The Cost of Equity of Wuhu Sanqi Interactive Entertainment Network Technology Group Co Ltd (002555.SZ) is 11.95%.
The Cost of Debt of Wuhu Sanqi Interactive Entertainment Network Technology Group Co Ltd (002555.SZ) is 5%.

RangeSelected
Cost of equity10.6% - 13.3%11.95%
Tax rate12.1% - 12.8%12.45%
Cost of debt5.0% - 5.0%5%
WACC10.1% - 12.5%11.3%
WACC

002555.SZ WACC calculation

CategoryLowHigh
Long-term bond rate2.7%3.2%
Equity market risk premium6.1%7.1%
Adjusted beta1.291.34
Additional risk adjustments0.0%0.5%
Cost of equity10.6%13.3%
Tax rate12.1%12.8%
Debt/Equity ratio
0.090.09
Cost of debt5.0%5.0%
After-tax WACC10.1%12.5%
Selected WACC11.3%

002555.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 002555.SZ:

cost_of_equity (11.95%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.29) + 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.