CNTFY
China Techfaith Wireless Communication Technology Ltd
Price:  
USD
Volume:  
9,290
China | Technology Hardware, Storage & Peripherals

CNTFY WACC - Weighted Average Cost of Capital

The WACC of China Techfaith Wireless Communication Technology Ltd (CNTFY) is 6.2%.

The Cost of Equity of China Techfaith Wireless Communication Technology Ltd (CNTFY) is 51.35%.
The Cost of Debt of China Techfaith Wireless Communication Technology Ltd (CNTFY) is 5.5%.

RangeSelected
Cost of equity32.9% - 69.8%51.35%
Tax rate1.7% - 4.9%3.3%
Cost of debt4.0% - 7.0%5.5%
WACC4.5% - 7.9%6.2%
WACC

CNTFY WACC calculation

CategoryLowHigh
Long-term bond rate3.2%3.7%
Equity market risk premium4.2%5.2%
Adjusted beta7.0212.53
Additional risk adjustments0.0%0.5%
Cost of equity32.9%69.8%
Tax rate1.7%4.9%
Debt/Equity ratio
51.6251.62
Cost of debt4.0%7.0%
After-tax WACC4.5%7.9%
Selected WACC6.2%

CNTFY WACC - Detailed calculations of Beta

LowHigh
Unlevered beta0.30.85
Relevered beta9.9918.21
Adjusted relevered beta7.0212.53

CNTFY'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 CNTFY:

cost_of_equity (51.35%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (7.02) + 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.