300516.SZ WACC - Weighted Average Cost of Capital
The WACC of Hubei Jiuzhiyang Infrared System Co Ltd (300516.SZ) is 10.5%.
| Range | Selected | |
| Cost of equity | 9.3% - 11.9% | 10.6% |
| Tax rate | 2.3% - 3.4% | 2.85% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 9.2% - 11.8% | 10.5% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1.08 | 1.16 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.3% | 11.9% |
| Tax rate | 2.3% | 3.4% |
| Debt/Equity ratio | 0.01 | 0.01 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 9.2% | 11.8% |
| Selected WACC | 10.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 300516.SZ | Hubei Jiuzhiyang Infrared System Co Ltd | 0.01 | 1.17 | 1.15 |
| 002161.SZ | Invengo Information Technology Co Ltd | 0.16 | 0.87 | 0.75 |
| 002546.SZ | Nanjing Xinlian Electronics Co Ltd | 0.04 | 1.06 | 1.03 |
| 002972.SZ | Shenzhen Keanda Electronic Technology Corp Ltd | 0.02 | 0.99 | 0.97 |
| 300202.SZ | Julong Co Ltd | 0.66 | 1.65 | 1.01 |
| 300360.SZ | Hangzhou Sunrise Technology Co Ltd | 0.03 | 1.19 | 1.15 |
| 300667.SZ | Beijing Beetech Inc | 0.01 | 1.33 | 1.32 |
| 300862.SZ | Anhui Landun Photoelectron Co Ltd | 0.04 | 1.89 | 1.81 |
| 603297.SS | Ningbo Yongxin Optics Co Ltd | 0.01 | 1.67 | 1.66 |
| 603516.SS | Beijing Tricolor Technology Co Ltd | 0 | 1.82 | 1.81 |
| Low | High | |
| Unlevered beta | 1.1 | 1.22 |
| Relevered beta | 1.12 | 1.24 |
| Adjusted relevered beta | 1.08 | 1.16 |
300516.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 300516.SZ:
cost_of_equity (10.60%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.08) + 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.