The WACC of StateHouse Holdings Inc (STHZ.CN) is 8.6%.
| Range | Selected | |
| Cost of equity | 67.80% - 107.80% | 87.80% |
| Tax rate | 7.80% - 19.10% | 13.45% |
| Cost of debt | 6.00% - 6.80% | 6.40% |
| WACC | 7.8% - 9.3% | 8.6% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 12.67 | 16.99 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 67.80% | 107.80% |
| Tax rate | 7.80% | 19.10% |
| Debt/Equity ratio | 25.83 | 25.83 |
| Cost of debt | 6.00% | 6.80% |
| After-tax WACC | 7.8% | 9.3% |
| Selected WACC | 8.6% | |
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 STHZ.CN:
cost_of_equity (87.80%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (12.67) + 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.