300161.SZ WACC - Weighted Average Cost of Capital
The WACC of Wuhan Huazhong Numerical Control Co Ltd (300161.SZ) is 9.8%.
| Range | Selected | |
| Cost of equity | 10.0% - 13.0% | 11.5% |
| Tax rate | 14.8% - 20.8% | 17.8% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 8.7% - 11.0% | 9.8% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1.19 | 1.31 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.0% | 13.0% |
| Tax rate | 14.8% | 20.8% |
| Debt/Equity ratio | 0.28 | 0.28 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 8.7% | 11.0% |
| Selected WACC | 9.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 300161.SZ | Wuhan Huazhong Numerical Control Co Ltd | 0.28 | 2.17 | 1.76 |
| 002161.SZ | Invengo Information Technology Co Ltd | 0.15 | 0.85 | 0.76 |
| 002197.SZ | SZZT Electronics Co Ltd | 0.68 | 0.97 | 0.62 |
| 002308.SZ | Vtron Group Co Ltd | 0.38 | 1.63 | 1.24 |
| 002870.SZ | Guangdong Senssun Weighing Apparatus Group Ltd | 0.67 | 1.05 | 0.68 |
| 003019.SZ | TES Touch Embedded Solutions Xiamen Co Ltd | 0.07 | 1.11 | 1.05 |
| 300065.SZ | Beijing Highlander Digital Technology Co Ltd | 0.01 | 1.69 | 1.68 |
| 300360.SZ | Hangzhou Sunrise Technology Co Ltd | 0.03 | 1.17 | 1.14 |
| 300531.SZ | Urovo Technology Co Ltd | 0.07 | 1.48 | 1.4 |
| 300771.SZ | Shenzhen Zhilai Sci and Tech Co Ltd | 0.06 | 1.31 | 1.25 |
| 600071.SS | Phenix Optics Co Ltd | 0.13 | 1.14 | 1.03 |
| Low | High | |
| Unlevered beta | 1.05 | 1.24 |
| Relevered beta | 1.28 | 1.46 |
| Adjusted relevered beta | 1.19 | 1.31 |
300161.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 300161.SZ:
cost_of_equity (11.50%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.19) + 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.