603898.SS
Guangzhou Holike Creative Home Co Ltd
Price:  
11.39 
CNY
Volume:  
2,389,781.00
China | Household Durables
Valuation
Overview
Financials
Forecast
Compare
Historical Price
SolvencyDividends
Transactions
People

603898.SS WACC - Weighted Average Cost of Capital

The WACC of Guangzhou Holike Creative Home Co Ltd (603898.SS) is 9.4%.

The Cost of Equity of Guangzhou Holike Creative Home Co Ltd (603898.SS) is 10.35%.
The Cost of Debt of Guangzhou Holike Creative Home Co Ltd (603898.SS) is 5.00%.

Range Selected
Cost of equity 9.10% - 11.60% 10.35%
Tax rate 12.20% - 15.70% 13.95%
Cost of debt 5.00% - 5.00% 5.00%
WACC 8.4% - 10.5% 9.4%
WACC

603898.SS WACC calculation

Category Low High
Long-term bond rate 2.7% 3.2%
Equity market risk premium 6.1% 7.1%
Adjusted beta 1.05 1.12
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.10% 11.60%
Tax rate 12.20% 15.70%
Debt/Equity ratio 0.19 0.19
Cost of debt 5.00% 5.00%
After-tax WACC 8.4% 10.5%
Selected WACC 9.4%

603898.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 603898.SS:

cost_of_equity (10.35%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.05) + 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.