300916.SZ WACC - Weighted Average Cost of Capital

The WACC of Shenzhen Longtech Smart Control Co Ltd (300916.SZ) is 11.5%.

The Cost of Equity of Shenzhen Longtech Smart Control Co Ltd (300916.SZ) is 11.90%.

The Cost of Debt of Shenzhen Longtech Smart Control Co Ltd (300916.SZ) is 5.00%.

	Range	Selected
Cost of equity	10.00% - 13.80%	11.90%
Tax rate	10.80% - 11.90%	11.35%
Cost of debt	5.00% - 5.00%	5.00%
WACC	9.7% - 13.2%	11.5%

WACC

300916.SZ WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	6.1%	7.1%
Adjusted beta	1.2	1.42

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.00%	13.80%

Tax rate	10.80%	11.90%
Debt/Equity ratio	0.06	0.06
Cost of debt	5.00%	5.00%

After-tax WACC	9.7%	13.2%


Selected WACC	11.5%

300916.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 300916.SZ:

cost_of_equity (11.90%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.2) + 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.