300901.SZ WACC - Weighted Average Cost of Capital

The WACC of Zhejiang Zoenn Design Co Ltd (300901.SZ) is 6.8%.

The Cost of Equity of Zhejiang Zoenn Design Co Ltd (300901.SZ) is 6.90%.

The Cost of Debt of Zhejiang Zoenn Design Co Ltd (300901.SZ) is 5.00%.

	Range	Selected
Cost of equity	5.20% - 8.60%	6.90%
Tax rate	23.40% - 24.30%	23.85%
Cost of debt	5.00% - 5.00%	5.00%
WACC	5.1% - 8.4%	6.8%

WACC

300901.SZ WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.41	0.69

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.20%	8.60%

Tax rate	23.40%	24.30%
Debt/Equity ratio	0.04	0.04
Cost of debt	5.00%	5.00%

After-tax WACC	5.1%	8.4%


Selected WACC	6.8%

300901.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 300901.SZ:

cost_of_equity (6.90%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.41) + 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.