300037.SZ WACC - Weighted Average Cost of Capital

The WACC of Shenzhen Capchem Technology Co Ltd (300037.SZ) is 10.3%.

The Cost of Equity of Shenzhen Capchem Technology Co Ltd (300037.SZ) is 11.50%.

The Cost of Debt of Shenzhen Capchem Technology Co Ltd (300037.SZ) is 5.00%.

	Range	Selected
Cost of equity	9.50% - 13.50%	11.50%
Tax rate	12.40% - 13.10%	12.75%
Cost of debt	5.00% - 5.00%	5.00%
WACC	8.6% - 12.0%	10.3%

WACC

300037.SZ WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	6.1%	7.1%
Adjusted beta	1.11	1.38

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.50%	13.50%

Tax rate	12.40%	13.10%
Debt/Equity ratio	0.2	0.2
Cost of debt	5.00%	5.00%

After-tax WACC	8.6%	12.0%


Selected WACC	10.3%

300037.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 300037.SZ:

cost_of_equity (11.50%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.11) + 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.