002614.SZ WACC - Weighted Average Cost of Capital

The WACC of Xiamen Comfort Science & Technology Group Co Ltd (002614.SZ) is 9.7%.

The Cost of Equity of Xiamen Comfort Science & Technology Group Co Ltd (002614.SZ) is 12.25%.

The Cost of Debt of Xiamen Comfort Science & Technology Group Co Ltd (002614.SZ) is 5.00%.

	Range	Selected
Cost of equity	10.60% - 13.90%	12.25%
Tax rate	17.90% - 22.10%	20.00%
Cost of debt	5.00% - 5.00%	5.00%
WACC	8.6% - 10.7%	9.7%

WACC

002614.SZ WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	6.1%	7.1%
Adjusted beta	1.3	1.43

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.60%	13.90%

Tax rate	17.90%	22.10%
Debt/Equity ratio	0.46	0.46
Cost of debt	5.00%	5.00%

After-tax WACC	8.6%	10.7%


Selected WACC	9.7%

002614.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 002614.SZ:

cost_of_equity (12.25%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.3) + 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.