000011.SZ WACC - Weighted Average Cost of Capital

The WACC of Shenzhen Properties & Resources Development Group Ltd (000011.SZ) is 5.4%.

The Cost of Equity of Shenzhen Properties & Resources Development Group Ltd (000011.SZ) is 7.90%.

The Cost of Debt of Shenzhen Properties & Resources Development Group Ltd (000011.SZ) is 5.00%.

	Range	Selected
Cost of equity	5.50% - 10.30%	7.90%
Tax rate	27.60% - 29.40%	28.50%
Cost of debt	5.00% - 5.00%	5.00%
WACC	4.4% - 6.5%	5.4%

WACC

000011.SZ WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.45	0.92

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.50%	10.30%

Tax rate	27.60%	29.40%
Debt/Equity ratio	1.3	1.3
Cost of debt	5.00%	5.00%

After-tax WACC	4.4%	6.5%


Selected WACC	5.4%

000011.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 000011.SZ:

cost_of_equity (7.90%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.45) + 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.