688589.SS WACC - Weighted Average Cost of Capital

The WACC of Leaguer Shenzhen MicroElectronics Corp (688589.SS) is 11.6%.

The Cost of Equity of Leaguer Shenzhen MicroElectronics Corp (688589.SS) is 12.40%.

The Cost of Debt of Leaguer Shenzhen MicroElectronics Corp (688589.SS) is 5.00%.

	Range	Selected
Cost of equity	10.90% - 13.90%	12.40%
Tax rate	6.50% - 8.10%	7.30%
Cost of debt	5.00% - 5.00%	5.00%
WACC	10.3% - 13.0%	11.6%

WACC

688589.SS WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	6.1%	7.1%
Adjusted beta	1.35	1.43

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.90%	13.90%

Tax rate	6.50%	8.10%
Debt/Equity ratio	0.11	0.11
Cost of debt	5.00%	5.00%

After-tax WACC	10.3%	13.0%


Selected WACC	11.6%

688589.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 688589.SS:

cost_of_equity (12.40%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.35) + 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.