688689.SS WACC - Weighted Average Cost of Capital

The WACC of Changzhou Galaxy Century Microelectronics Co Ltd (688689.SS) is 11.3%.

The Cost of Equity of Changzhou Galaxy Century Microelectronics Co Ltd (688689.SS) is 12.30%.

The Cost of Debt of Changzhou Galaxy Century Microelectronics Co Ltd (688689.SS) is 5.00%.

	Range	Selected
Cost of equity	10.50% - 14.10%	12.30%
Tax rate	10.30% - 10.80%	10.55%
Cost of debt	5.00% - 5.00%	5.00%
WACC	9.7% - 12.8%	11.3%

WACC

688689.SS WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	6.1%	7.1%
Adjusted beta	1.28	1.46

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.50%	14.10%

Tax rate	10.30%	10.80%
Debt/Equity ratio	0.15	0.15
Cost of debt	5.00%	5.00%

After-tax WACC	9.7%	12.8%


Selected WACC	11.3%

688689.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 688689.SS:

cost_of_equity (12.30%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.28) + 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.