603348.SS WACC - Weighted Average Cost of Capital

The WACC of Guangdong Wencan Die Casting Co Ltd (603348.SS) is 10.5%.

The Cost of Equity of Guangdong Wencan Die Casting Co Ltd (603348.SS) is 12.95%.

The Cost of Debt of Guangdong Wencan Die Casting Co Ltd (603348.SS) is 5.00%.

	Range	Selected
Cost of equity	11.50% - 14.40%	12.95%
Tax rate	9.30% - 16.20%	12.75%
Cost of debt	5.00% - 5.00%	5.00%
WACC	9.5% - 11.5%	10.5%

WACC

603348.SS WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	6.1%	7.1%
Adjusted beta	1.44	1.5

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.50%	14.40%

Tax rate	9.30%	16.20%
Debt/Equity ratio	0.4	0.4
Cost of debt	5.00%	5.00%

After-tax WACC	9.5%	11.5%


Selected WACC	10.5%

603348.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 603348.SS:

cost_of_equity (12.95%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.44) + 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.