The WACC of Wangsu Science & Technology Co Ltd (300017.SZ) is 11.4%.
Range | Selected | |
Cost of equity | 10.3% - 12.8% | 11.55% |
Tax rate | 6.2% - 7.2% | 6.7% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 10.1% - 12.6% | 11.4% |
Category | Low | High |
Long-term bond rate | 2.7% | 3.2% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 1.25 | 1.28 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 10.3% | 12.8% |
Tax rate | 6.2% | 7.2% |
Debt/Equity ratio | 0.03 | 0.03 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 10.1% | 12.6% |
Selected WACC | 11.4% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
300017.SZ | Wangsu Science & Technology Co Ltd | 0.03 | 1.86 | 1.81 |
000971.SZ | Gosun Holding Co Ltd | 0.61 | 0.98 | 0.63 |
1686.HK | Sunevision Holdings Ltd | 0.84 | 1.12 | 0.63 |
300383.SZ | Beijing Sinnet Technology Co Ltd | 0.14 | 1.55 | 1.37 |
300674.SZ | Yusys Technologies Co Ltd | 0.01 | 1.78 | 1.77 |
300738.SZ | Guangdong Aofei Data Technology Co Ltd | 0.32 | 1.77 | 1.36 |
600602.SS | Inesa Intelligent Tech Inc | 0.03 | 1.44 | 1.41 |
603881.SS | Shanghai AtHub Co Ltd | 0.17 | 1.36 | 1.18 |
688030.SS | Hillstone Networks Co Ltd | 0.18 | 1.48 | 1.27 |
688158.SS | UCloud Technology Co Ltd | 0.01 | 1.98 | 1.96 |
Low | High | |
Unlevered beta | 1.33 | 1.38 |
Relevered beta | 1.37 | 1.42 |
Adjusted relevered beta | 1.25 | 1.28 |
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 300017.SZ:
cost_of_equity (11.55%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.25) + 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.