The WACC of Shenzhen Click Technology Co Ltd (002782.SZ) is 10.5%.
Range | Selected | |
Cost of equity | 9.8% - 12.7% | 11.25% |
Tax rate | 18.9% - 22.2% | 20.55% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 9.2% - 11.8% | 10.5% |
Category | Low | High |
Long-term bond rate | 2.7% | 3.2% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 1.17 | 1.26 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 9.8% | 12.7% |
Tax rate | 18.9% | 22.2% |
Debt/Equity ratio | 0.11 | 0.11 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 9.2% | 11.8% |
Selected WACC | 10.5% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
002782.SZ | Shenzhen Click Technology Co Ltd | 0.11 | 1.58 | 1.46 |
002724.SZ | Ocean's King Lighting Science & Technology Co Ltd | 0.03 | 1.29 | 1.26 |
002730.SZ | Dianguang Explosion-proof Technology Co Ltd | 0.09 | 1.02 | 0.95 |
002801.SZ | Hangzhou Weiguang Electronic Co Ltd | 0.01 | 1.02 | 1.02 |
300048.SZ | Hiconics Eco-energy Technology Co Ltd | 0.14 | 1.26 | 1.14 |
300341.SZ | Motic Xiamen Electric Group Co Ltd | 0.01 | 1.88 | 1.87 |
300593.SZ | Beijing Xinleineng Technology Co Ltd | 0.17 | 1.92 | 1.69 |
300822.SZ | Shenzhen Bestek Technology Co Ltd | 0 | 1.32 | 1.32 |
300870.SZ | Shenzhen Honor Electronic Co Ltd | 0.13 | 1.27 | 1.15 |
605288.SS | Changzhou Kaidi Electrical Inc | 0.06 | 1.17 | 1.12 |
Low | High | |
Unlevered beta | 1.15 | 1.28 |
Relevered beta | 1.25 | 1.39 |
Adjusted relevered beta | 1.17 | 1.26 |
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 002782.SZ:
cost_of_equity (11.25%) = 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.