603606.SS
Ningbo Orient Wires & Cables Co Ltd
Price:  
48.59 
CNY
Volume:  
7,791,565.00
China | Electrical Equipment
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603606.SS WACC - Weighted Average Cost of Capital

The WACC of Ningbo Orient Wires & Cables Co Ltd (603606.SS) is 10.9%.

The Cost of Equity of Ningbo Orient Wires & Cables Co Ltd (603606.SS) is 11.45%.
The Cost of Debt of Ningbo Orient Wires & Cables Co Ltd (603606.SS) is 5.00%.

Range Selected
Cost of equity 10.10% - 12.80% 11.45%
Tax rate 12.60% - 12.90% 12.75%
Cost of debt 5.00% - 5.00% 5.00%
WACC 9.6% - 12.2% 10.9%
WACC

603606.SS WACC calculation

Category Low High
Long-term bond rate 2.7% 3.2%
Equity market risk premium 6.1% 7.1%
Adjusted beta 1.21 1.28
Additional risk adjustments 0.0% 0.5%
Cost of equity 10.10% 12.80%
Tax rate 12.60% 12.90%
Debt/Equity ratio 0.08 0.08
Cost of debt 5.00% 5.00%
After-tax WACC 9.6% 12.2%
Selected WACC 10.9%

603606.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 603606.SS:

cost_of_equity (11.45%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.21) + 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.