300554.SZ
NanJing Sanchao Advanced Materials Co Ltd
Price:  
23.85 
CNY
Volume:  
3,261,360
China | Semiconductors & Semiconductor Equipment

300554.SZ WACC - Weighted Average Cost of Capital

The WACC of NanJing Sanchao Advanced Materials Co Ltd (300554.SZ) is 10.7%.

The Cost of Equity of NanJing Sanchao Advanced Materials Co Ltd (300554.SZ) is 11.15%.
The Cost of Debt of NanJing Sanchao Advanced Materials Co Ltd (300554.SZ) is 5%.

RangeSelected
Cost of equity9.2% - 13.1%11.15%
Tax rate13.5% - 18.5%16%
Cost of debt5.0% - 5.0%5%
WACC8.9% - 12.6%10.7%
WACC

300554.SZ WACC calculation

CategoryLowHigh
Long-term bond rate2.7%3.2%
Equity market risk premium6.1%7.1%
Adjusted beta1.061.32
Additional risk adjustments0.0%0.5%
Cost of equity9.2%13.1%
Tax rate13.5%18.5%
Debt/Equity ratio
0.060.06
Cost of debt5.0%5.0%
After-tax WACC8.9%12.6%
Selected WACC10.7%

300554.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 300554.SZ:

cost_of_equity (11.15%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.06) + 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.