002709.SZ WACC - Weighted Average Cost of Capital

The WACC of Guangzhou Tinci Materials Technology Co Ltd (002709.SZ) is 10.4%.

The Cost of Equity of Guangzhou Tinci Materials Technology Co Ltd (002709.SZ) is 11.70%.

The Cost of Debt of Guangzhou Tinci Materials Technology Co Ltd (002709.SZ) is 5.00%.

	Range	Selected
Cost of equity	10.40% - 13.00%	11.70%
Tax rate	18.00% - 20.40%	19.20%
Cost of debt	5.00% - 5.00%	5.00%
WACC	9.3% - 11.5%	10.4%

WACC

002709.SZ WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	6.1%	7.1%
Adjusted beta	1.26	1.31

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.40%	13.00%

Tax rate	18.00%	20.40%
Debt/Equity ratio	0.2	0.2
Cost of debt	5.00%	5.00%

After-tax WACC	9.3%	11.5%


Selected WACC	10.4%

002709.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 002709.SZ:

cost_of_equity (11.70%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.26) + 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.