002617.SZ WACC - Weighted Average Cost of Capital

The WACC of Roshow Technology Co Ltd (002617.SZ) is 10.8%.

The Cost of Equity of Roshow Technology Co Ltd (002617.SZ) is 12.05%.

The Cost of Debt of Roshow Technology Co Ltd (002617.SZ) is 5.00%.

	Range	Selected
Cost of equity	10.50% - 13.60%	12.05%
Tax rate	23.30% - 25.10%	24.20%
Cost of debt	5.00% - 5.00%	5.00%
WACC	9.5% - 12.1%	10.8%

WACC

002617.SZ WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	6.1%	7.1%
Adjusted beta	1.28	1.39

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.50%	13.60%

Tax rate	23.30%	25.10%
Debt/Equity ratio	0.17	0.17
Cost of debt	5.00%	5.00%

After-tax WACC	9.5%	12.1%


Selected WACC	10.8%

002617.SZ'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 002617.SZ:

cost_of_equity (12.05%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.28) + 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.