603806.SS
Hangzhou First Applied Material Co Ltd
Price:  
13.48 
CNY
Volume:  
33,742,790
China | Semiconductors & Semiconductor Equipment

603806.SS WACC - Weighted Average Cost of Capital

The WACC of Hangzhou First Applied Material Co Ltd (603806.SS) is 10.8%.

The Cost of Equity of Hangzhou First Applied Material Co Ltd (603806.SS) is 11.4%.
The Cost of Debt of Hangzhou First Applied Material Co Ltd (603806.SS) is 5%.

RangeSelected
Cost of equity9.9% - 12.9%11.4%
Tax rate10.5% - 11.5%11%
Cost of debt5.0% - 5.0%5%
WACC9.5% - 12.2%10.8%
WACC

603806.SS WACC calculation

CategoryLowHigh
Long-term bond rate2.7%3.2%
Equity market risk premium6.1%7.1%
Adjusted beta1.181.29
Additional risk adjustments0.0%0.5%
Cost of equity9.9%12.9%
Tax rate10.5%11.5%
Debt/Equity ratio
0.090.09
Cost of debt5.0%5.0%
After-tax WACC9.5%12.2%
Selected WACC10.8%

603806.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 603806.SS:

cost_of_equity (11.40%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.18) + 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.