603290.SS WACC - Weighted Average Cost of Capital
The WACC of StarPower Semiconductor Ltd (603290.SS) is 11.8%.
| Range | Selected | |
| Cost of equity | 10.4% - 14.3% | 12.35% |
| Tax rate | 11.9% - 12.5% | 12.2% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 9.9% - 13.6% | 11.8% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1.26 | 1.49 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.4% | 14.3% |
| Tax rate | 11.9% | 12.5% |
| Debt/Equity ratio | 0.08 | 0.08 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 9.9% | 13.6% |
| Selected WACC | 11.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 603290.SS | StarPower Semiconductor Ltd | 0.08 | 1.76 | 1.64 |
| 002185.SZ | Tianshui Huatian Technology Co Ltd | 0.43 | 1.32 | 0.96 |
| 002610.SZ | Jiangsu Akcome Science & Technology Co Ltd | 3.38 | 1.75 | 0.44 |
| 300223.SZ | Ingenic Semiconductor Co Ltd | 0 | 1.84 | 1.84 |
| 300661.SZ | SG Micro Corp | 0 | 1.61 | 1.61 |
| 300724.SZ | Shenzhen SC New Energy Technology Corp | 0.02 | 1.95 | 1.92 |
| 603068.SS | Beken Corp | 0.02 | 1.02 | 1 |
| 603893.SS | Fuzhou Rockchip Electronics Co Ltd | 0 | 1.49 | 1.49 |
| 6415.TW | Silergy Corp | 0.01 | 0.77 | 0.76 |
| 688536.SS | 3Peak Inc | 0.02 | 1.88 | 1.85 |
| Low | High | |
| Unlevered beta | 1.3 | 1.62 |
| Relevered beta | 1.39 | 1.73 |
| Adjusted relevered beta | 1.26 | 1.49 |
603290.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 603290.SS:
cost_of_equity (12.35%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.26) + 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.