002593.SZ WACC - Weighted Average Cost of Capital

The WACC of Xiamen Sunrise Group Co Ltd (002593.SZ) is 9.7%.

The Cost of Equity of Xiamen Sunrise Group Co Ltd (002593.SZ) is 12.70%.

The Cost of Debt of Xiamen Sunrise Group Co Ltd (002593.SZ) is 5.00%.

	Range	Selected
Cost of equity	11.30% - 14.10%	12.70%
Tax rate	12.30% - 17.70%	15.00%
Cost of debt	5.00% - 5.00%	5.00%
WACC	8.8% - 10.5%	9.7%

WACC

002593.SZ WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	6.1%	7.1%
Adjusted beta	1.4	1.46

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.30%	14.10%

Tax rate	12.30%	17.70%
Debt/Equity ratio	0.56	0.56
Cost of debt	5.00%	5.00%

After-tax WACC	8.8%	10.5%


Selected WACC	9.7%

002593.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 002593.SZ:

cost_of_equity (12.70%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.4) + 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.