The WACC of Wuhan DR Laser Technology Corp Ltd (300776.SZ) is 11.1%.
Range | Selected | |
Cost of equity | 10.1% - 12.8% | 11.45% |
Tax rate | 10.5% - 11.7% | 11.1% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 9.8% - 12.4% | 11.1% |
Category | Low | High |
Long-term bond rate | 2.7% | 3.2% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 1.22 | 1.28 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 10.1% | 12.8% |
Tax rate | 10.5% | 11.7% |
Debt/Equity ratio | 0.06 | 0.06 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 9.8% | 12.4% |
Selected WACC | 11.1% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
300776.SZ | Wuhan DR Laser Technology Corp Ltd | 0.06 | 1.4 | 1.34 |
000032.SZ | Shenzhen Sed Industry Co Ltd | 0.74 | 1.5 | 0.9 |
002214.SZ | Zhe Jiang Dali Technology Co Ltd | 0.07 | 1.31 | 1.23 |
002975.SZ | Zhuhai Bojay Electronics Co Ltd | 0.13 | 1.41 | 1.27 |
300567.SZ | Wuhan Jingce Electronic Group Co Ltd | 0.23 | 1.71 | 1.42 |
603025.SS | Beijing Dahao Technology Corp Ltd | 0.08 | 1.17 | 1.1 |
603416.SS | WuXi Xinje Electric Co Ltd | 0.02 | 1.42 | 1.39 |
688001.SS | Suzhou HYC Technology Co Ltd | 0.1 | 1.81 | 1.67 |
688007.SS | Appotronics Corp Ltd | 0.13 | 1.69 | 1.51 |
688100.SS | Willfar Information Technology Co Ltd | 0.02 | 1.29 | 1.27 |
Low | High | |
Unlevered beta | 1.27 | 1.36 |
Relevered beta | 1.33 | 1.42 |
Adjusted relevered beta | 1.22 | 1.28 |
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 300776.SZ:
cost_of_equity (11.45%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.22) + 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.