000017.SZ
Shenzhen China Bicycle Company Holdings Ltd
Price:  
6.43 
CNY
Volume:  
36,603,920.00
China | Leisure Products
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000017.SZ WACC - Weighted Average Cost of Capital

The WACC of Shenzhen China Bicycle Company Holdings Ltd (000017.SZ) is 8.3%.

The Cost of Equity of Shenzhen China Bicycle Company Holdings Ltd (000017.SZ) is 8.30%.
The Cost of Debt of Shenzhen China Bicycle Company Holdings Ltd (000017.SZ) is 5.00%.

Range Selected
Cost of equity 6.80% - 9.80% 8.30%
Tax rate 6.30% - 12.60% 9.45%
Cost of debt 5.00% - 5.00% 5.00%
WACC 6.8% - 9.8% 8.3%
WACC

000017.SZ WACC calculation

Category Low High
Long-term bond rate 2.7% 3.2%
Equity market risk premium 6.1% 7.1%
Adjusted beta 0.67 0.86
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.80% 9.80%
Tax rate 6.30% 12.60%
Debt/Equity ratio 0 0
Cost of debt 5.00% 5.00%
After-tax WACC 6.8% 9.8%
Selected WACC 8.3%

000017.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 000017.SZ:

cost_of_equity (8.30%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.67) + 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.