JKS WACC - Weighted Average Cost of Capital
The WACC of JinkoSolar Holding Co Ltd (JKS) is 7.1%.
| Range | Selected | |
| Cost of equity | 24.2% - 42.7% | 33.45% |
| Tax rate | 23.0% - 27.5% | 25.25% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 5.3% - 9.0% | 7.1% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 4.41 | 6.75 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 24.2% | 42.7% |
| Tax rate | 23.0% | 27.5% |
| Debt/Equity ratio | 8.65 | 8.65 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 5.3% | 9.0% |
| Selected WACC | 7.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| JKS | JinkoSolar Holding Co Ltd | 7.66 | 0.67 | 0.1 |
| DSPG | Dsp Group Inc | 0 | 0.9 | 0.9 |
| EMAN | eMagin Corp | 0.09 | 1.49 | 1.39 |
| MAXN | Maxeon Solar Technologies Ltd | 7.41 | 0.48 | 0.07 |
| MX | MagnaChip Semiconductor Corp | 0.21 | 1.69 | 1.47 |
| NPTN | NeoPhotonics Corp | 0.05 | 0.75 | 0.72 |
| QUIK | QuickLogic Corp | 0.27 | 1.92 | 1.6 |
| SQNS | Sequans Communications SA | 1.7 | 1.11 | 0.49 |
| TGAN | Transphorm Technology Inc | 0.04 | 1.66 | 1.61 |
| 981.HK | Semiconductor Manufacturing International Corp | 0.18 | 1.41 | 1.24 |
| Low | High | |
| Unlevered beta | 0.83 | 1.3 |
| Relevered beta | 6.09 | 9.58 |
| Adjusted relevered beta | 4.41 | 6.75 |
JKS'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 JKS:
cost_of_equity (33.45%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (4.41) + 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.