The WACC of Xdc Industries Shenzhen Ltd (300615.SZ) is 9.0%.
Range | Selected | |
Cost of equity | 7.8% - 10.4% | 9.1% |
Tax rate | 16.7% - 18.3% | 17.5% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 7.8% - 10.3% | 9.0% |
Category | Low | High |
Long-term bond rate | 2.7% | 3.2% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 0.84 | 0.95 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 7.8% | 10.4% |
Tax rate | 16.7% | 18.3% |
Debt/Equity ratio | 0.01 | 0.01 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 7.8% | 10.3% |
Selected WACC | 9.0% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
300615.SZ | Xdc Industries Shenzhen Ltd | 0.01 | 0.84 | 0.83 |
000020.SZ | Shenzhen Zhongheng Huafa Co Ltd | 0.04 | 0.89 | 0.86 |
002134.SZ | Tianjin Printronics Circuit Corp | 0.13 | 1.8 | 1.63 |
002199.SZ | Zhejiang East Crystal Electronic Co Ltd | 0.07 | 1.03 | 0.98 |
002729.SZ | Hollyland China Electronics Technology Corp Ltd | 0.01 | 1.37 | 1.36 |
002808.SZ | Suzhou Goldengreen Technologies Ltd | 0.03 | 0.2 | 0.2 |
1991.HK | Ta Yang Group Holdings Ltd | 2.26 | -0.37 | -0.13 |
300799.SZ | Beijing Zuojiang Technology Co Ltd | 0.33 | 1.35 | 1.06 |
603829.SS | Jiangsu Luokai Mechanical & Electrical Co Ltd | 0.3 | 0.79 | 0.63 |
8249.HK | Zhejiang RuiYuan Intelligent Control Technology Co Ltd | 0.06 | 0.05 | 0.04 |
Low | High | |
Unlevered beta | 0.75 | 0.91 |
Relevered beta | 0.76 | 0.93 |
Adjusted relevered beta | 0.84 | 0.95 |
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 300615.SZ:
cost_of_equity (9.10%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.84) + 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.