600845.SS WACC - Weighted Average Cost of Capital
The WACC of Shanghai Baosight Software Co Ltd (600845.SS) is 11.5%.
| Range | Selected | |
| Cost of equity | 10.2% - 13.1% | 11.65% |
| Tax rate | 6.7% - 7.2% | 6.95% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 10.1% - 12.8% | 11.5% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1.23 | 1.32 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.2% | 13.1% |
| Tax rate | 6.7% | 7.2% |
| Debt/Equity ratio | 0.03 | 0.03 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 10.1% | 12.8% |
| Selected WACC | 11.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 600845.SS | Shanghai Baosight Software Co Ltd | 0.03 | 0.97 | 0.95 |
| 000676.SZ | Genimous Technology Co Ltd | 0.03 | 1.25 | 1.22 |
| 000997.SZ | Newland Digital Technology Co Ltd | 0.04 | 1.51 | 1.45 |
| 002063.SZ | YGSOFT Inc | 0.01 | 1.35 | 1.34 |
| 002153.SZ | Beijing Shiji Information Technology Co Ltd | 0 | 1.57 | 1.57 |
| 002195.SZ | Shanghai 2345 Network Holding Group Co Ltd | 0 | 2.06 | 2.06 |
| 300271.SZ | Beijing Thunisoft Co Ltd | 0.01 | 1.44 | 1.43 |
| 600536.SS | China National Software & Service Co Ltd | 0.06 | 1.32 | 1.26 |
| 600718.SS | Neusoft Corp | 0.12 | 1.22 | 1.11 |
| 688588.SS | Linkage Software Co Ltd | 0.06 | 1.85 | 1.75 |
| Low | High | |
| Unlevered beta | 1.31 | 1.44 |
| Relevered beta | 1.34 | 1.48 |
| Adjusted relevered beta | 1.23 | 1.32 |
600845.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 600845.SS:
cost_of_equity (11.65%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.23) + 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.