The WACC of NOVA Technology Corp Ltd (300921.SZ) is 6.5%.
Range | Selected | |
Cost of equity | 5.5% - 7.5% | 6.5% |
Tax rate | 7.5% - 8.9% | 8.2% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 5.5% - 7.5% | 6.5% |
Category | Low | High |
Long-term bond rate | 2.7% | 3.2% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 0.38 | 0.47 |
Additional risk adjustments | 0.5% | 1.0% |
Cost of equity | 5.5% | 7.5% |
Tax rate | 7.5% | 8.9% |
Debt/Equity ratio | 0.01 | 0.01 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 5.5% | 7.5% |
Selected WACC | 6.5% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
300921.SZ | NOVA Technology Corp Ltd | 0.01 | 1.57 | 1.56 |
093320.KQ | Kinx Inc | 0.19 | 0.06 | 0.05 |
300560.SZ | Zhong Fu Tong Group Co Ltd | 0.37 | 1.41 | 1.05 |
600804.SS | Dr.Peng Telecom & Media Group Co Ltd | 4.14 | 0.21 | 0.04 |
603322.SS | Super Telecom Co Ltd | 0.08 | 1.02 | 0.95 |
9450.T | Fibergate Inc | 0.27 | 0.48 | 0.39 |
LINK.JK | Link Net Tbk PT | 1.53 | 0.17 | 0.07 |
MNF.AX | MNF Group Ltd | 0.04 | -0.02 | -0.02 |
ST1.AX | Spirit Technology Solutions Ltd | 0.48 | 0.13 | 0.09 |
VN8.AX | Vonex Ltd | 1.17 | -0.75 | -0.36 |
Low | High | |
Unlevered beta | 0.06 | 0.21 |
Relevered beta | 0.07 | 0.21 |
Adjusted relevered beta | 0.38 | 0.47 |
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 300921.SZ:
cost_of_equity (6.50%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.38) + risk_adjustments (0.75%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.