000019.SZ
Shenzhen Cereals Holdings Co Ltd
Price:  
6.86 
CNY
Volume:  
8,885,136
China | Food Products

000019.SZ WACC - Weighted Average Cost of Capital

The WACC of Shenzhen Cereals Holdings Co Ltd (000019.SZ) is 8.0%.

The Cost of Equity of Shenzhen Cereals Holdings Co Ltd (000019.SZ) is 8.8%.
The Cost of Debt of Shenzhen Cereals Holdings Co Ltd (000019.SZ) is 5%.

RangeSelected
Cost of equity7.7% - 9.9%8.8%
Tax rate14.0% - 16.4%15.2%
Cost of debt5.0% - 5.0%5%
WACC7.1% - 8.8%8.0%
WACC

000019.SZ WACC calculation

CategoryLowHigh
Long-term bond rate2.7%3.2%
Equity market risk premium6.1%7.1%
Adjusted beta0.820.87
Additional risk adjustments0.0%0.5%
Cost of equity7.7%9.9%
Tax rate14.0%16.4%
Debt/Equity ratio
0.230.23
Cost of debt5.0%5.0%
After-tax WACC7.1%8.8%
Selected WACC8.0%

000019.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 000019.SZ:

cost_of_equity (8.80%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.82) + 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.