The WACC of Zhejiang Risun Intelligent Technology Co Ltd (688215.SS) is 9.3%.
Range | Selected | |
Cost of equity | 8.3% - 11.0% | 9.65% |
Tax rate | 10.6% - 14.7% | 12.65% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 8.1% - 10.6% | 9.3% |
Category | Low | High |
Long-term bond rate | 2.7% | 3.2% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 0.92 | 1.03 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 8.3% | 11.0% |
Tax rate | 10.6% | 14.7% |
Debt/Equity ratio | 0.06 | 0.06 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 8.1% | 10.6% |
Selected WACC | 9.3% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
688215.SS | Zhejiang Risun Intelligent Technology Co Ltd | 0.06 | 1.56 | 1.48 |
002499.SZ | Kelin Environmental Protection Equipment Inc | 1.79 | 1.14 | 0.45 |
002633.SZ | Shenke Slide Bearing Corp | 0.05 | 0.71 | 0.68 |
002667.SZ | AnShan Heavy Duty Mining Machinery Co Ltd | 0.21 | 0.81 | 0.68 |
002943.SZ | Hunan Yujing Machinery Co Ltd | 0.24 | 1.18 | 0.98 |
1673.HK | Huazhang Technology Holding Ltd | 0.27 | 0.27 | 0.22 |
300069.SZ | Zhejiang Jinlihua Electric Co Ltd | 0.07 | 1.05 | 0.99 |
300275.SZ | Chongqing Mas Sci & Tech Co Ltd | 0.05 | 1.19 | 1.13 |
300700.SZ | Changsha DIALINE New Material Sci & Tech Co Ltd | 0.11 | 1.6 | 1.47 |
603580.SS | AA Industrial Belting Shanghai Co Ltd | 0.01 | 0.94 | 0.93 |
Low | High | |
Unlevered beta | 0.83 | 0.99 |
Relevered beta | 0.88 | 1.04 |
Adjusted relevered beta | 0.92 | 1.03 |
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 688215.SS:
cost_of_equity (9.65%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.92) + 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.