603800.SS
Suzhou Douson Drilling&Production Equipment Co Ltd
Price:  
29.84 
CNY
Volume:  
6,741,734.00
China | Energy Equipment & Services
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603800.SS WACC - Weighted Average Cost of Capital

The WACC of Suzhou Douson Drilling&Production Equipment Co Ltd (603800.SS) is 9.1%.

The Cost of Equity of Suzhou Douson Drilling&Production Equipment Co Ltd (603800.SS) is 9.80%.
The Cost of Debt of Suzhou Douson Drilling&Production Equipment Co Ltd (603800.SS) is 5.00%.

Range Selected
Cost of equity 7.70% - 11.90% 9.80%
Tax rate 16.00% - 16.60% 16.30%
Cost of debt 5.00% - 5.00% 5.00%
WACC 7.2% - 10.9% 9.1%
WACC

603800.SS WACC calculation

Category Low High
Long-term bond rate 2.7% 3.2%
Equity market risk premium 6.1% 7.1%
Adjusted beta 0.82 1.16
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.70% 11.90%
Tax rate 16.00% 16.60%
Debt/Equity ratio 0.16 0.16
Cost of debt 5.00% 5.00%
After-tax WACC 7.2% 10.9%
Selected WACC 9.1%

603800.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 603800.SS:

cost_of_equity (9.80%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.82) + 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.