600184.SS WACC - Weighted Average Cost of Capital
The WACC of North Electro-Optic Co Ltd (600184.SS) is 10.3%.
| Range | Selected | |
| Cost of equity | 9.5% - 12.3% | 10.9% |
| Tax rate | 5.2% - 7.2% | 6.2% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 9.1% - 11.6% | 10.3% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1.11 | 1.21 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.5% | 12.3% |
| Tax rate | 5.2% | 7.2% |
| Debt/Equity ratio | 0.1 | 0.1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 9.1% | 11.6% |
| Selected WACC | 10.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 600184.SS | North Electro-Optic Co Ltd | 0.1 | 1.12 | 1.03 |
| 000697.SZ | Ligeance Aerospace Technology Co Ltd | 0.44 | 1.49 | 1.06 |
| 002413.SZ | Jiangsu Leike Defense Technology Co Ltd | 0.05 | 1.5 | 1.43 |
| 002933.SZ | Beijing Emerging Eastern Aviation Equipment Co Ltd | 0.13 | 1.43 | 1.27 |
| 300123.SZ | YaGuang Technology Group Co Ltd | 0.36 | 1.61 | 1.21 |
| 300722.SZ | Jiangxi Xinyu Guoke Technology Co Ltd | 0 | 1.05 | 1.05 |
| 300875.SZ | Tianjin Jieqiang Power Equipment Co Ltd | 0.01 | 1.25 | 1.24 |
| 300900.SZ | Guanglian Aviation Industry Co Ltd | 0.35 | 1.6 | 1.21 |
| 600391.SS | AECC Aero Science and Technology Co Ltd | 0.31 | 1.18 | 0.92 |
| 601606.SS | Anhui Great Wall Military Industry Co Ltd | 0.08 | 1.16 | 1.07 |
| Low | High | |
| Unlevered beta | 1.07 | 1.21 |
| Relevered beta | 1.16 | 1.31 |
| Adjusted relevered beta | 1.11 | 1.21 |
600184.SS'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 600184.SS:
cost_of_equity (10.90%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.11) + 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.