NOAH
Noah Holdings Ltd
Price:  
9.44 
USD
Volume:  
39,660.00
China | Capital Markets
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NOAH WACC - Weighted Average Cost of Capital

The WACC of Noah Holdings Ltd (NOAH) is 6.0%.

The Cost of Equity of Noah Holdings Ltd (NOAH) is 8.20%.
The Cost of Debt of Noah Holdings Ltd (NOAH) is 5.00%.

Range Selected
Cost of equity 7.10% - 9.30% 8.20%
Tax rate 23.00% - 26.30% 24.65%
Cost of debt 5.00% - 5.00% 5.00%
WACC 5.5% - 6.5% 6.0%
WACC

NOAH WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.7 0.79
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.10% 9.30%
Tax rate 23.00% 26.30%
Debt/Equity ratio 1 1
Cost of debt 5.00% 5.00%
After-tax WACC 5.5% 6.5%
Selected WACC 6.0%

NOAH'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 NOAH:

cost_of_equity (8.20%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.7) + 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.