603829.SS WACC - Weighted Average Cost of Capital
The WACC of Jiangsu Luokai Mechanical & Electrical Co Ltd (603829.SS) is 9.8%.
| Range | Selected | |
| Cost of equity | 9.4% - 12.3% | 10.85% |
| Tax rate | 8.7% - 10.0% | 9.35% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 8.6% - 11.0% | 9.8% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1.09 | 1.21 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.4% | 12.3% |
| Tax rate | 8.7% | 10.0% |
| Debt/Equity ratio | 0.19 | 0.19 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 8.6% | 11.0% |
| Selected WACC | 9.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 603829.SS | Jiangsu Luokai Mechanical & Electrical Co Ltd | 0.19 | 0.76 | 0.65 |
| 000020.SZ | Shenzhen Zhongheng Huafa Co Ltd | 0.04 | 1 | 0.96 |
| 002134.SZ | Tianjin Printronics Circuit Corp | 0.07 | 1.86 | 1.75 |
| 002199.SZ | Zhejiang East Crystal Electronic Co Ltd | 0.12 | 1.09 | 0.98 |
| 002655.SZ | Gettop Acoustic Co Ltd | 0.1 | 1.27 | 1.16 |
| 002808.SZ | Suzhou Goldengreen Technologies Ltd | 0.04 | 0.24 | 0.24 |
| 300162.SZ | Ledman Optoelectronic Co Ltd | 0.16 | 1.45 | 1.26 |
| 300615.SZ | Xdc Industries Shenzhen Ltd | 0.02 | 0.89 | 0.88 |
| 300647.SZ | Shenzhen Fluence Technology PLC | 0.35 | 1.43 | 1.08 |
| 600237.SS | Anhui Tongfeng Electronics Co Ltd | 0.02 | 1.21 | 1.2 |
| Low | High | |
| Unlevered beta | 0.97 | 1.11 |
| Relevered beta | 1.13 | 1.31 |
| Adjusted relevered beta | 1.09 | 1.21 |
603829.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 603829.SS:
cost_of_equity (10.85%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.09) + 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.