300047.SZ WACC - Weighted Average Cost of Capital

The WACC of Shenzhen Tianyuan Dic Information Technology Co Ltd (300047.SZ) is 10.5%.

The Cost of Equity of Shenzhen Tianyuan Dic Information Technology Co Ltd (300047.SZ) is 12.75%.

The Cost of Debt of Shenzhen Tianyuan Dic Information Technology Co Ltd (300047.SZ) is 5.00%.

	Range	Selected
Cost of equity	10.90% - 14.60%	12.75%
Tax rate	21.80% - 22.50%	22.15%
Cost of debt	5.00% - 5.00%	5.00%
WACC	9.1% - 11.8%	10.5%

WACC

300047.SZ WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	6.1%	7.1%
Adjusted beta	1.34	1.53

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.90%	14.60%

Tax rate	21.80%	22.50%
Debt/Equity ratio	0.35	0.35
Cost of debt	5.00%	5.00%

After-tax WACC	9.1%	11.8%


Selected WACC	10.5%

300047.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 300047.SZ:

cost_of_equity (12.75%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.34) + 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.