688083.SS WACC - Weighted Average Cost of Capital
The WACC of ZWSOFT Guangzhou Co Ltd (688083.SS) is 12.6%.
| Range | Selected | |
| Cost of equity | 10.7% - 14.5% | 12.6% |
| Tax rate | 12.5% - 14.3% | 13.4% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 10.7% - 14.4% | 12.6% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1.31 | 1.51 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.7% | 14.5% |
| Tax rate | 12.5% | 14.3% |
| Debt/Equity ratio | 0 | 0 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 10.7% | 14.4% |
| Selected WACC | 12.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 688083.SS | ZWSOFT Guangzhou Co Ltd | 0 | 1.75 | 1.75 |
| 002230.SZ | Iflytek Co Ltd | 0.1 | 1.23 | 1.14 |
| 002410.SZ | Glodon Co Ltd | 0.01 | 2.03 | 2.01 |
| 3888.HK | Kingsoft Corp Ltd | 0.07 | 1.27 | 1.19 |
| 600570.SS | Hundsun Technologies Inc | 0.01 | 2.02 | 2 |
| 600588.SS | Yonyou Network Technology Co Ltd | 0.16 | 1.74 | 1.53 |
| 600845.SS | Shanghai Baosight Software Co Ltd | 0.03 | 0.98 | 0.96 |
| 688111.SS | Beijing Kingsoft Office Software Inc | 0 | 1.82 | 1.82 |
| Low | High | |
| Unlevered beta | 1.46 | 1.76 |
| Relevered beta | 1.46 | 1.76 |
| Adjusted relevered beta | 1.31 | 1.51 |
688083.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 688083.SS:
cost_of_equity (12.60%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.31) + 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.