981.HK WACC - Weighted Average Cost of Capital

The WACC of Semiconductor Manufacturing International Corp (981.HK) is 9.0%.

The Cost of Equity of Semiconductor Manufacturing International Corp (981.HK) is 9.90%.

The Cost of Debt of Semiconductor Manufacturing International Corp (981.HK) is 4.25%.

	Range	Selected
Cost of equity	8.40% - 11.40%	9.90%
Tax rate	4.60% - 6.90%	5.75%
Cost of debt	4.00% - 4.50%	4.25%
WACC	7.7% - 10.2%	9.0%

WACC

981.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.93	1.07

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.40%	11.40%

Tax rate	4.60%	6.90%
Debt/Equity ratio	0.19	0.19
Cost of debt	4.00%	4.50%

After-tax WACC	7.7%	10.2%


Selected WACC	9.0%

981.HK'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 981.HK:

cost_of_equity (9.90%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.93) + 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.