300627.SZ WACC - Weighted Average Cost of Capital

The WACC of Shanghai Huace Navigation Technology Ltd (300627.SZ) is 11.8%.

The Cost of Equity of Shanghai Huace Navigation Technology Ltd (300627.SZ) is 11.90%.

The Cost of Debt of Shanghai Huace Navigation Technology Ltd (300627.SZ) is 5.00%.

	Range	Selected
Cost of equity	10.20% - 13.60%	11.90%
Tax rate	2.60% - 4.80%	3.70%
Cost of debt	5.00% - 5.00%	5.00%
WACC	10.1% - 13.5%	11.8%

WACC

300627.SZ WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	6.1%	7.1%
Adjusted beta	1.23	1.4

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.20%	13.60%

Tax rate	2.60%	4.80%
Debt/Equity ratio	0.01	0.01
Cost of debt	5.00%	5.00%

After-tax WACC	10.1%	13.5%


Selected WACC	11.8%

300627.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 300627.SZ:

cost_of_equity (11.90%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.23) + 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.