688002.SS WACC - Weighted Average Cost of Capital
The WACC of Raytron Technology Co Ltd (688002.SS) is 10.3%.
| Range | Selected | |
| Cost of equity | 8.6% - 12.7% | 10.65% |
| Tax rate | 4.8% - 5.8% | 5.3% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 8.4% - 12.2% | 10.3% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.97 | 1.27 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.6% | 12.7% |
| Tax rate | 4.8% | 5.8% |
| Debt/Equity ratio | 0.07 | 0.07 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 8.4% | 12.2% |
| Selected WACC | 10.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 688002.SS | Raytron Technology Co Ltd | 0.07 | 1.65 | 1.55 |
| 000032.SZ | Shenzhen Sed Industry Co Ltd | 0.79 | 1.49 | 0.85 |
| 000536.SZ | CPT Technology Group Co Ltd | 0.26 | 0.84 | 0.67 |
| 002414.SZ | Wuhan Guide Infrared Co Ltd | 0.03 | 1.24 | 1.21 |
| 002980.SZ | Shenzhen Everbest Machinery Industry Co Ltd | 0.03 | 0.87 | 0.85 |
| 300747.SZ | Wuhan Raycus Fiber Laser Technologies Co Ltd | 0.09 | 1.63 | 1.5 |
| 603556.SS | Hexing Electrical Co Ltd | 0.06 | 0.33 | 0.31 |
| 688188.SS | Shanghai Friendess Electronic Technology Corp Ltd | 0 | 0.92 | 0.92 |
| 688686.SS | OPT Machine Vision Tech Co Ltd | 0 | 2.09 | 2.09 |
| 688777.SS | Zhejiang Supcon Technology Co Ltd | 0.05 | 1.56 | 1.48 |
| Low | High | |
| Unlevered beta | 0.89 | 1.32 |
| Relevered beta | 0.96 | 1.4 |
| Adjusted relevered beta | 0.97 | 1.27 |
688002.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 688002.SS:
cost_of_equity (10.65%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.97) + 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.