002980.SZ WACC - Weighted Average Cost of Capital

The WACC of Shenzhen Everbest Machinery Industry Co Ltd (002980.SZ) is 11.1%.

The Cost of Equity of Shenzhen Everbest Machinery Industry Co Ltd (002980.SZ) is 11.30%.

The Cost of Debt of Shenzhen Everbest Machinery Industry Co Ltd (002980.SZ) is 5.00%.

	Range	Selected
Cost of equity	9.90% - 12.70%	11.30%
Tax rate	7.70% - 9.80%	8.75%
Cost of debt	5.00% - 5.00%	5.00%
WACC	9.7% - 12.4%	11.1%

WACC

002980.SZ WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	6.1%	7.1%
Adjusted beta	1.17	1.26

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.90%	12.70%

Tax rate	7.70%	9.80%
Debt/Equity ratio	0.04	0.04
Cost of debt	5.00%	5.00%

After-tax WACC	9.7%	12.4%


Selected WACC	11.1%

002980.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 002980.SZ:

cost_of_equity (11.30%) = 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.