The WACC of Thunder Software Technology Co Ltd (300496.SZ) is 11.7%.
Range | Selected | |
Cost of equity | 10.5% - 13.1% | 11.8% |
Tax rate | 4.2% - 5.9% | 5.05% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 10.4% - 13.0% | 11.7% |
Category | Low | High |
Long-term bond rate | 2.7% | 3.2% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 1.27 | 1.32 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 10.5% | 13.1% |
Tax rate | 4.2% | 5.9% |
Debt/Equity ratio | 0.01 | 0.01 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 10.4% | 13.0% |
Selected WACC | 11.7% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
300496.SZ | Thunder Software Technology Co Ltd | 0.01 | 2.34 | 2.33 |
002123.SZ | Montnets Cloud Technology Group Co Ltd | 0.12 | 1.23 | 1.1 |
002410.SZ | Glodon Co Ltd | 0.01 | 2.03 | 2.01 |
1675.HK | AsiaInfo Technologies Ltd | 0.02 | 1.44 | 1.41 |
300571.SZ | Hangzhou Anysoft Information Technology Co Ltd | 0.42 | 1.75 | 1.25 |
300598.SZ | ArcherMind Technology Nanjing Co Ltd | 0.07 | 1.47 | 1.38 |
3888.HK | Kingsoft Corp Ltd | 0.07 | 1.27 | 1.19 |
603039.SS | Shanghai Weaver Network Co Ltd | 0 | 1.51 | 1.51 |
603533.SS | IReader Technology Co Ltd | 0 | 1.53 | 1.53 |
603927.SS | Sinosoft Co Ltd | 0.04 | 1.49 | 1.44 |
688088.SS | ArcSoft Corp Ltd | 0 | 1.83 | 1.83 |
Low | High | |
Unlevered beta | 1.41 | 1.51 |
Relevered beta | 1.4 | 1.48 |
Adjusted relevered beta | 1.27 | 1.32 |
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 300496.SZ:
cost_of_equity (11.80%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.27) + 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.