002558.SZ WACC - Weighted Average Cost of Capital

The WACC of Giant Network Group Co Ltd (002558.SZ) is 10.1%.

The Cost of Equity of Giant Network Group Co Ltd (002558.SZ) is 10.20%.

The Cost of Debt of Giant Network Group Co Ltd (002558.SZ) is 5.00%.

	Range	Selected
Cost of equity	7.50% - 12.90%	10.20%
Tax rate	1.00% - 2.20%	1.60%
Cost of debt	5.00% - 5.00%	5.00%
WACC	7.4% - 12.8%	10.1%

WACC

002558.SZ WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.78	1.29

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.50%	12.90%

Tax rate	1.00%	2.20%
Debt/Equity ratio	0	0
Cost of debt	5.00%	5.00%

After-tax WACC	7.4%	12.8%


Selected WACC	10.1%

002558.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 002558.SZ:

cost_of_equity (10.20%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.78) + 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.