The WACC of Ways Electron Co Ltd (605218.SS) is 10.8%.
Range | Selected | |
Cost of equity | 9.8% - 12.7% | 11.25% |
Tax rate | 6.6% - 7.9% | 7.25% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 9.5% - 12.2% | 10.8% |
Category | Low | High |
Long-term bond rate | 2.7% | 3.2% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 1.16 | 1.26 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 9.8% | 12.7% |
Tax rate | 6.6% | 7.9% |
Debt/Equity ratio | 0.06 | 0.06 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 9.5% | 12.2% |
Selected WACC | 10.8% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
605218.SS | Ways Electron Co Ltd | 0.06 | 1.56 | 1.47 |
002655.SZ | Gettop Acoustic Co Ltd | 0.11 | 1.27 | 1.16 |
002885.SZ | Shenzhen JingQuanHua Electronics Co Ltd | 0.19 | 0.93 | 0.79 |
002902.SZ | Dongguan Mentech Optical & Magnetic Co Ltd | 0.23 | 1.4 | 1.16 |
002937.SZ | Ningbo Sunrise Elc Technology Co Ltd | 0.09 | 1.41 | 1.29 |
300543.SZ | Shenzhen Longood Intelligent Electric Co Ltd | 0.16 | 1.69 | 1.47 |
300691.SZ | Union Optech Co Ltd | 0.17 | 1.56 | 1.35 |
300790.SZ | DongGuan YuTong Optical Technology Co Ltd | 0.26 | 1.65 | 1.33 |
600353.SS | Chengdu Xuguang Electronics Co Ltd | 0.06 | 1.24 | 1.18 |
603386.SS | Guangdong Champion Asia Electronics Co Ltd | 0.35 | 1.45 | 1.1 |
Low | High | |
Unlevered beta | 1.17 | 1.31 |
Relevered beta | 1.24 | 1.39 |
Adjusted relevered beta | 1.16 | 1.26 |
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 605218.SS:
cost_of_equity (11.25%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.16) + 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.