603042.SS
Nanjing Huamai Technology Co Ltd
Price:  
16.3 
CNY
Volume:  
12,948,080
China | Communications Equipment

603042.SS WACC - Weighted Average Cost of Capital

The WACC of Nanjing Huamai Technology Co Ltd (603042.SS) is 6.8%.

The Cost of Equity of Nanjing Huamai Technology Co Ltd (603042.SS) is 7.05%.
The Cost of Debt of Nanjing Huamai Technology Co Ltd (603042.SS) is 5%.

RangeSelected
Cost of equity6.0% - 8.1%7.05%
Tax rate9.8% - 26.5%18.15%
Cost of debt5.0% - 5.0%5%
WACC5.9% - 7.7%6.8%
WACC

603042.SS WACC calculation

CategoryLowHigh
Long-term bond rate2.7%3.2%
Equity market risk premium6.1%7.1%
Adjusted beta0.540.62
Additional risk adjustments0.0%0.5%
Cost of equity6.0%8.1%
Tax rate9.8%26.5%
Debt/Equity ratio
0.080.08
Cost of debt5.0%5.0%
After-tax WACC5.9%7.7%
Selected WACC6.8%

603042.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 603042.SS:

cost_of_equity (7.05%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.54) + 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.