300925.SZ
Shenzhen Farben Information Technology Co Ltd
Price:  
22.58 
CNY
Volume:  
28,790,660.00
China | IT Services
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300925.SZ WACC - Weighted Average Cost of Capital

The WACC of Shenzhen Farben Information Technology Co Ltd (300925.SZ) is 10.9%.

The Cost of Equity of Shenzhen Farben Information Technology Co Ltd (300925.SZ) is 10.95%.
The Cost of Debt of Shenzhen Farben Information Technology Co Ltd (300925.SZ) is 5.00%.

Range Selected
Cost of equity 9.50% - 12.40% 10.95%
Tax rate 3.90% - 6.10% 5.00%
Cost of debt 5.00% - 5.00% 5.00%
WACC 9.4% - 12.3% 10.9%
WACC

300925.SZ WACC calculation

Category Low High
Long-term bond rate 2.7% 3.2%
Equity market risk premium 6.1% 7.1%
Adjusted beta 1.12 1.23
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.50% 12.40%
Tax rate 3.90% 6.10%
Debt/Equity ratio 0.02 0.02
Cost of debt 5.00% 5.00%
After-tax WACC 9.4% 12.3%
Selected WACC 10.9%

300925.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 300925.SZ:

cost_of_equity (10.95%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.12) + 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.