688055.SS WACC - Weighted Average Cost of Capital
The WACC of InfoVision Optoelectronics Kunshan Co Ltd (688055.SS) is 9.6%.
| Range | Selected | |
| Cost of equity | 8.8% - 11.8% | 10.3% |
| Tax rate | 7.9% - 9.9% | 8.9% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 8.3% - 10.9% | 9.6% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1.01 | 1.14 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.8% | 11.8% |
| Tax rate | 7.9% | 9.9% |
| Debt/Equity ratio | 0.14 | 0.14 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 8.3% | 10.9% |
| Selected WACC | 9.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 688055.SS | InfoVision Optoelectronics Kunshan Co Ltd | 0.14 | 1.79 | 1.59 |
| 000636.SZ | Guangdong Fenghua Advanced Technology Holding Co Ltd | 0.11 | 1.27 | 1.16 |
| 002056.SZ | Hengdian Group DMEGC Magnetics Co Ltd | 0.28 | 1.09 | 0.87 |
| 002138.SZ | Shenzhen Sunlord Electronics Co Ltd | 0.16 | 1.17 | 1.02 |
| 002273.SZ | Zhejiang Crystal-Optech Co Ltd | 0.02 | 0.81 | 0.79 |
| 002387.SZ | Visionox Technology Inc | 1.7 | 1.76 | 0.69 |
| 002389.SZ | Aerospace CH UAV Co Ltd | 0.05 | 1.6 | 1.53 |
| 002402.SZ | Shenzhen H&T Intelligent Control Co Ltd | 0.19 | 0.92 | 0.78 |
| 600563.SS | Xiamen Faratronic Co Ltd | 0.06 | 0.96 | 0.91 |
| 603678.SS | Fujian Torch Electron Technology Co Ltd | 0.07 | 1.36 | 1.27 |
| Low | High | |
| Unlevered beta | 0.9 | 1.08 |
| Relevered beta | 1.01 | 1.21 |
| Adjusted relevered beta | 1.01 | 1.14 |
688055.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 688055.SS:
cost_of_equity (10.30%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.01) + 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.