603189.SS WACC - Weighted Average Cost of Capital
The WACC of Shanghai Wondertek Software Co Ltd (603189.SS) is 9.8%.
| Range | Selected | |
| Cost of equity | 8.3% - 11.2% | 9.75% |
| Tax rate | 9.0% - 11.4% | 10.2% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 8.3% - 11.2% | 9.8% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.93 | 1.06 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.3% | 11.2% |
| Tax rate | 9.0% | 11.4% |
| Debt/Equity ratio | 0 | 0 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 8.3% | 11.2% |
| Selected WACC | 9.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 603189.SS | Shanghai Wondertek Software Co Ltd | 0 | 1.15 | 1.15 |
| 002253.SZ | Wisesoft Co Ltd | 0.08 | 1.17 | 1.09 |
| 1588.HK | Chanjet Information Technology Co Ltd | 0 | 0.69 | 0.69 |
| 300096.SZ | YLZ Information Technology Co Ltd | 0.01 | 0.93 | 0.93 |
| 300209.SZ | TIZA Information Industry Corporation Inc | 0.01 | 0.28 | 0.28 |
| 300277.SZ | Shenzhen Hirisun Technology Inc | 0 | 1.09 | 1.09 |
| 300302.SZ | Toyou Feiji Electronics Co Ltd | 0.05 | 1.84 | 1.76 |
| 603636.SS | Linewell Software Co Ltd | 0.23 | 1.01 | 0.84 |
| 688555.SS | Essence Information Technology Co Ltd | 1.37 | -1.25 | -0.56 |
| 9911.HK | Newborn Town Inc | 0.01 | 1.58 | 1.57 |
| Low | High | |
| Unlevered beta | 0.89 | 1.09 |
| Relevered beta | 0.9 | 1.09 |
| Adjusted relevered beta | 0.93 | 1.06 |
603189.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 603189.SS:
cost_of_equity (9.75%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.93) + 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.