CAAS
China Automotive Systems Inc
Price:  
4.08 
USD
Volume:  
7,915.00
China | Auto Components
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CAAS WACC - Weighted Average Cost of Capital

The WACC of China Automotive Systems Inc (CAAS) is 7.6%.

The Cost of Equity of China Automotive Systems Inc (CAAS) is 13.15%.
The Cost of Debt of China Automotive Systems Inc (CAAS) is 4.25%.

Range Selected
Cost of equity 10.40% - 15.90% 13.15%
Tax rate 13.40% - 15.30% 14.35%
Cost of debt 4.00% - 4.50% 4.25%
WACC 6.4% - 8.9% 7.6%
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 1.42 1.96
Additional risk adjustments 0.0% 0.5%
Cost of equity 10.40% 15.90%
Tax rate 13.40% 15.30%
Debt/Equity ratio 1.39 1.39
Cost of debt 4.00% 4.50%
After-tax WACC 6.4% 8.9%
Selected WACC 7.6%

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 (13.15%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.42) + 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.