1103.HK WACC - Weighted Average Cost of Capital

The WACC of Shanghai Dasheng Agriculture Finance Technology Co Ltd (1103.HK) is 9.2%.

The Cost of Equity of Shanghai Dasheng Agriculture Finance Technology Co Ltd (1103.HK) is 54.10%.

The Cost of Debt of Shanghai Dasheng Agriculture Finance Technology Co Ltd (1103.HK) is 5.00%.

	Range	Selected
Cost of equity	39.50% - 68.70%	54.10%
Tax rate	0.70% - 0.80%	0.75%
Cost of debt	5.00% - 5.00%	5.00%
WACC	7.9% - 10.4%	9.2%

WACC

1103.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	6.12	9.28

Additional risk adjustments	0.0%	0.5%
Cost of equity	39.50%	68.70%

Tax rate	0.70%	0.80%
Debt/Equity ratio	10.65	10.65
Cost of debt	5.00%	5.00%

After-tax WACC	7.9%	10.4%


Selected WACC	9.2%

1103.HK'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 1103.HK:

cost_of_equity (54.10%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (6.12) + 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.