603869.SS
ENC Digital Technology Co Ltd
Price:  
5.91 
CNY
Volume:  
1,767,400.00
China | IT Services
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603869.SS WACC - Weighted Average Cost of Capital

The WACC of ENC Digital Technology Co Ltd (603869.SS) is 7.9%.

The Cost of Equity of ENC Digital Technology Co Ltd (603869.SS) is 8.40%.
The Cost of Debt of ENC Digital Technology Co Ltd (603869.SS) is 5.00%.

Range Selected
Cost of equity 6.90% - 9.90% 8.40%
Tax rate 25.00% - 25.00% 25.00%
Cost of debt 5.00% - 5.00% 5.00%
WACC 6.6% - 9.2% 7.9%
WACC

603869.SS WACC calculation

Category Low High
Long-term bond rate 2.7% 3.2%
Equity market risk premium 6.1% 7.1%
Adjusted beta 0.7 0.87
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.90% 9.90%
Tax rate 25.00% 25.00%
Debt/Equity ratio 0.12 0.12
Cost of debt 5.00% 5.00%
After-tax WACC 6.6% 9.2%
Selected WACC 7.9%

603869.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 603869.SS:

cost_of_equity (8.40%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.7) + 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.