002625.SZ WACC - Weighted Average Cost of Capital

The WACC of Kuang-Chi Technologies Co Ltd (002625.SZ) is 9.3%.

The Cost of Equity of Kuang-Chi Technologies Co Ltd (002625.SZ) is 9.40%.

The Cost of Debt of Kuang-Chi Technologies Co Ltd (002625.SZ) is 5.00%.

	Range	Selected
Cost of equity	7.50% - 11.30%	9.40%
Tax rate	13.50% - 14.20%	13.85%
Cost of debt	5.00% - 5.00%	5.00%
WACC	7.5% - 11.2%	9.3%

WACC

002625.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	1.06

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.50%	11.30%

Tax rate	13.50%	14.20%
Debt/Equity ratio	0	0
Cost of debt	5.00%	5.00%

After-tax WACC	7.5%	11.2%


Selected WACC	9.3%

002625.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 002625.SZ:

cost_of_equity (9.40%) = 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.