002975.SZ
Zhuhai Bojay Electronics Co Ltd
Price:  
34.18 
CNY
Volume:  
4,973,590.00
China | Electronic Equipment, Instruments & Components
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002975.SZ WACC - Weighted Average Cost of Capital

The WACC of Zhuhai Bojay Electronics Co Ltd (002975.SZ) is 10.5%.

The Cost of Equity of Zhuhai Bojay Electronics Co Ltd (002975.SZ) is 11.20%.
The Cost of Debt of Zhuhai Bojay Electronics Co Ltd (002975.SZ) is 5.00%.

Range Selected
Cost of equity 9.60% - 12.80% 11.20%
Tax rate 10.60% - 14.60% 12.60%
Cost of debt 5.00% - 5.00% 5.00%
WACC 9.1% - 11.9% 10.5%
WACC

002975.SZ WACC calculation

Category Low High
Long-term bond rate 2.7% 3.2%
Equity market risk premium 6.1% 7.1%
Adjusted beta 1.13 1.28
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.60% 12.80%
Tax rate 10.60% 14.60%
Debt/Equity ratio 0.12 0.12
Cost of debt 5.00% 5.00%
After-tax WACC 9.1% 11.9%
Selected WACC 10.5%

002975.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 002975.SZ:

cost_of_equity (11.20%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.13) + 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.