603897.SS WACC - Weighted Average Cost of Capital
The WACC of Zhejiang Grandwall Electric Science&Technology Co Ltd (603897.SS) is 7.4%.
| Range | Selected | |
| Cost of equity | 7.7% - 10.5% | 9.1% |
| Tax rate | 15.4% - 17.0% | 16.2% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.5% - 8.3% | 7.4% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.82 | 0.95 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.7% | 10.5% |
| Tax rate | 15.4% | 17.0% |
| Debt/Equity ratio | 0.53 | 0.53 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.5% | 8.3% |
| Selected WACC | 7.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 603897.SS | Zhejiang Grandwall Electric Science&Technology Co Ltd | 0.53 | 1.15 | 0.8 |
| 002533.SZ | Gold Cup Electric Apparatus Co Ltd | 0.54 | 0.97 | 0.67 |
| 002692.SZ | Yuan Cheng Cable Co Ltd | 0.41 | 0.68 | 0.51 |
| 002733.SZ | Shenzhen Center Power Tech Co Ltd | 0.23 | 0.61 | 0.52 |
| 505.HK | Xingye Alloy Materials Group Ltd | 1.68 | 0.06 | 0.02 |
| 600268.SS | Guodian Nanjing Automation Co Ltd | 0.07 | 0.72 | 0.68 |
| 600525.SS | ChangYuan Technology Group Ltd | 1.23 | 0.53 | 0.26 |
| 600590.SS | Tellhow Sci-Tech Co Ltd | 0.83 | 1.68 | 0.99 |
| 601567.SS | Ningbo Sanxing Medical Electric Co Ltd | 0.16 | 0.22 | 0.2 |
| 603618.SS | Hangzhou Cable Co Ltd | 1.28 | 1.29 | 0.63 |
| Low | High | |
| Unlevered beta | 0.51 | 0.64 |
| Relevered beta | 0.73 | 0.93 |
| Adjusted relevered beta | 0.82 | 0.95 |
603897.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 603897.SS:
cost_of_equity (9.10%) = 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.