300946.SZ WACC - Weighted Average Cost of Capital

The WACC of Hengda New Materials Fujian Co Ltd (300946.SZ) is 10.0%.

The Cost of Equity of Hengda New Materials Fujian Co Ltd (300946.SZ) is 10.15%.

The Cost of Debt of Hengda New Materials Fujian Co Ltd (300946.SZ) is 5.00%.

	Range	Selected
Cost of equity	7.60% - 12.70%	10.15%
Tax rate	11.90% - 12.50%	12.20%
Cost of debt	5.00% - 5.00%	5.00%
WACC	7.5% - 12.6%	10.0%

WACC

300946.SZ WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.8	1.27

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.60%	12.70%

Tax rate	11.90%	12.50%
Debt/Equity ratio	0.02	0.02
Cost of debt	5.00%	5.00%

After-tax WACC	7.5%	12.6%


Selected WACC	10.0%

300946.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 300946.SZ:

cost_of_equity (10.15%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.8) + 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.