The WACC of Cloopen Group Holding Ltd (RAAS) is 8.5%.
Range | Selected | |
Cost of equity | 6.8% - 10.5% | 8.65% |
Tax rate | 0.4% - 0.6% | 0.5% |
Cost of debt | 5.3% - 7.0% | 6.15% |
WACC | 6.7% - 10.3% | 8.5% |
Category | Low | High |
Long-term bond rate | 4.2% | 4.7% |
Equity market risk premium | 5.0% | 6.0% |
Adjusted beta | 0.53 | 0.89 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.8% | 10.5% |
Tax rate | 0.4% | 0.6% |
Debt/Equity ratio | 0.05 | 0.05 |
Cost of debt | 5.3% | 7.0% |
After-tax WACC | 6.7% | 10.3% |
Selected WACC | 8.5% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
RAAS | Cloopen Group Holding Ltd | 0.05 | 1.02 | 0.97 |
BIGG.CN | BIGG Digital Assets Inc | 0 | 2 | 2 |
PCYG | Park City Group Inc | 0 | 0.15 | 0.15 |
PERK.CN | Perk Labs Inc | 0.03 | -0.4 | -0.39 |
PKK.CN | Peak Fintech Group Inc | 1.91 | 1.84 | 0.63 |
QUBT | Quantum Computing Inc | 0.91 | 1.63 | 0.86 |
RWWI | Rand Worldwide Inc | 0.01 | 0.55 | 0.55 |
SHSP | SharpSpring Inc | 0.02 | 1.84 | 1.79 |
SMSI | Smith Micro Software Inc | 1.05 | 1.21 | 0.59 |
TEUM | Pareteum Corp | 206.35 | 0.8 | 0 |
Low | High | |
Unlevered beta | 0.58 | 0.72 |
Relevered beta | 0.3 | 0.84 |
Adjusted relevered beta | 0.53 | 0.89 |
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 RAAS:
cost_of_equity (8.65%) = risk_free_rate (4.45%) + equity_risk_premium (5.50%) * adjusted_beta (0.53) + 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.