300750.SZ WACC - Weighted Average Cost of Capital

The WACC of Contemporary Amperex Technology Co Ltd (300750.SZ) is 8.6%.

The Cost of Equity of Contemporary Amperex Technology Co Ltd (300750.SZ) is 9.50%.

The Cost of Debt of Contemporary Amperex Technology Co Ltd (300750.SZ) is 5.00%.

	Range	Selected
Cost of equity	8.10% - 10.90%	9.50%
Tax rate	11.60% - 12.90%	12.25%
Cost of debt	5.00% - 5.00%	5.00%
WACC	7.5% - 9.8%	8.6%

WACC

300750.SZ WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.89	1.01

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.10%	10.90%

Tax rate	11.60%	12.90%
Debt/Equity ratio	0.2	0.2
Cost of debt	5.00%	5.00%

After-tax WACC	7.5%	9.8%


Selected WACC	8.6%

300750.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 300750.SZ:

cost_of_equity (9.50%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.89) + 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.