2382.HK WACC - Weighted Average Cost of Capital

The WACC of Sunny Optical Technology Group Co Ltd (2382.HK) is 9.6%.

The Cost of Equity of Sunny Optical Technology Group Co Ltd (2382.HK) is 10.05%.

The Cost of Debt of Sunny Optical Technology Group Co Ltd (2382.HK) is 4.35%.

	Range	Selected
Cost of equity	8.30% - 11.80%	10.05%
Tax rate	11.10% - 12.00%	11.55%
Cost of debt	4.00% - 4.70%	4.35%
WACC	8.0% - 11.2%	9.6%

WACC

2382.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.92	1.13

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.30%	11.80%

Tax rate	11.10%	12.00%
Debt/Equity ratio	0.09	0.09
Cost of debt	4.00%	4.70%

After-tax WACC	8.0%	11.2%


Selected WACC	9.6%

2382.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 2382.HK:

cost_of_equity (10.05%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.92) + 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.