The WACC of Beijing SDL Technology Co Ltd (002658.SZ) is 11.4%.
Range | Selected | |
Cost of equity | 9.9% - 12.9% | 11.4% |
Tax rate | 13.0% - 13.8% | 13.4% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 9.8% - 12.9% | 11.4% |
Category | Low | High |
Long-term bond rate | 2.7% | 3.2% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 1.17 | 1.3 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 9.9% | 12.9% |
Tax rate | 13.0% | 13.8% |
Debt/Equity ratio | 0 | 0 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 9.8% | 12.9% |
Selected WACC | 11.4% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
002658.SZ | Beijing SDL Technology Co Ltd | 0 | 0.86 | 0.86 |
002362.SZ | Hanwang Technology Co Ltd | 0.03 | 1.41 | 1.37 |
300066.SZ | Sanchuan Wisdom Technology Co Ltd | 0 | 1.46 | 1.45 |
300259.SZ | Suntront Technology Co Ltd | 0 | 1.57 | 1.56 |
300331.SZ | SVG Tech Group Co Ltd | 0.11 | 1.67 | 1.53 |
300416.SZ | Suzhou Sushi Testing Group Co Ltd | 0.16 | 1.71 | 1.5 |
300427.SZ | Red Phase INC | 0.02 | 0.56 | 0.55 |
300531.SZ | Urovo Technology Co Ltd | 0.07 | 1.52 | 1.43 |
603700.SS | Ningbo Water Meter Co Ltd | 0.09 | 1.04 | 0.96 |
688003.SS | Suzhou TZTEK Technology Co Ltd | 0.11 | 1.18 | 1.07 |
Low | High | |
Unlevered beta | 1.25 | 1.44 |
Relevered beta | 1.25 | 1.45 |
Adjusted relevered beta | 1.17 | 1.3 |
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 002658.SZ:
cost_of_equity (11.40%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.17) + 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.