300297.SZ WACC - Weighted Average Cost of Capital

The WACC of Bluedon Information Security Technologies Co Ltd (300297.SZ) is 10.0%.

The Cost of Equity of Bluedon Information Security Technologies Co Ltd (300297.SZ) is 78.40%.

The Cost of Debt of Bluedon Information Security Technologies Co Ltd (300297.SZ) is 5.00%.

	Range	Selected
Cost of equity	63.50% - 93.30%	78.40%
Tax rate	3.20% - 7.30%	5.25%
Cost of debt	5.00% - 5.00%	5.00%
WACC	9.0% - 10.9%	10.0%

WACC

300297.SZ WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	6.1%	7.1%
Adjusted beta	9.92	12.58

Additional risk adjustments	0.0%	0.5%
Cost of equity	63.50%	93.30%

Tax rate	3.20%	7.30%
Debt/Equity ratio	13.11	13.11
Cost of debt	5.00%	5.00%

After-tax WACC	9.0%	10.9%


Selected WACC	10.0%

300297.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 300297.SZ:

cost_of_equity (78.40%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (9.92) + 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.