CAAS
China Automotive Systems Inc
Price:  
3.83 
USD
Volume:  
13,647.00
China | Auto Components
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CAAS WACC - Weighted Average Cost of Capital

The WACC of China Automotive Systems Inc (CAAS) is 7.4%.

The Cost of Equity of China Automotive Systems Inc (CAAS) is 12.70%.
The Cost of Debt of China Automotive Systems Inc (CAAS) is 4.25%.

Range Selected
Cost of equity 10.30% - 15.10% 12.70%
Tax rate 13.40% - 15.30% 14.35%
Cost of debt 4.00% - 4.50% 4.25%
WACC 6.3% - 8.5% 7.4%
WACC

CAAS WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.39 1.84
Additional risk adjustments 0.0% 0.5%
Cost of equity 10.30% 15.10%
Tax rate 13.40% 15.30%
Debt/Equity ratio 1.42 1.42
Cost of debt 4.00% 4.50%
After-tax WACC 6.3% 8.5%
Selected WACC 7.4%

CAAS'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 CAAS:

cost_of_equity (12.70%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.39) + 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.