603700.SS WACC - Weighted Average Cost of Capital
The WACC of Ningbo Water Meter Co Ltd (603700.SS) is 11.2%.
| Range | Selected | |
| Cost of equity | 10.3% - 13.3% | 11.8% |
| Tax rate | 11.1% - 11.7% | 11.4% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 9.8% - 12.5% | 11.2% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1.24 | 1.35 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.3% | 13.3% |
| Tax rate | 11.1% | 11.7% |
| Debt/Equity ratio | 0.09 | 0.09 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 9.8% | 12.5% |
| Selected WACC | 11.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 603700.SS | Ningbo Water Meter Co Ltd | 0.09 | 1.04 | 0.96 |
| 002308.SZ | Vtron Group Co Ltd | 0.38 | 1.63 | 1.22 |
| 002362.SZ | Hanwang Technology Co Ltd | 0.03 | 1.41 | 1.37 |
| 002519.SZ | Jiangsu Yinhe Electronics Co Ltd | 0.02 | 1.32 | 1.3 |
| 002658.SZ | Beijing SDL Technology Co Ltd | 0 | 0.86 | 0.86 |
| 300066.SZ | Sanchuan Wisdom Technology Co Ltd | 0 | 1.46 | 1.45 |
| 300259.SZ | Suntront Technology Co Ltd | 0 | 1.57 | 1.56 |
| 300331.SZ | SVG Tech Group Co Ltd | 0.11 | 1.67 | 1.52 |
| 300416.SZ | Suzhou Sushi Testing Group Co Ltd | 0.16 | 1.71 | 1.5 |
| 300427.SZ | Red Phase INC | 0.02 | 0.56 | 0.55 |
| Low | High | |
| Unlevered beta | 1.27 | 1.41 |
| Relevered beta | 1.36 | 1.52 |
| Adjusted relevered beta | 1.24 | 1.35 |
603700.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 603700.SS:
cost_of_equity (11.80%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.24) + 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.