The WACC of Grandjoy Holdings Group Co Ltd (000031.SZ) is 4.4%.
Range | Selected | |
Cost of equity | 7.3% - 10.1% | 8.7% |
Tax rate | 25.0% - 25.0% | 25% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 4.2% - 4.5% | 4.4% |
Category | Low | High |
Long-term bond rate | 2.7% | 3.2% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 0.76 | 0.9 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 7.3% | 10.1% |
Tax rate | 25.0% | 25.0% |
Debt/Equity ratio | 7.25 | 7.25 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 4.2% | 4.5% |
Selected WACC | 4.4% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
000031.SZ | Grandjoy Holdings Group Co Ltd | 7.25 | 1.48 | 0.23 |
000537.SZ | Tianjin Guangyu Development Co Ltd | 3.37 | 1.01 | 0.29 |
000540.SZ | Zhongtian Financial Group Co Ltd | 15.12 | 1.56 | 0.13 |
000732.SZ | Tahoe Group Co Ltd | 106.9 | 1.75 | 0.02 |
002244.SZ | Hangzhou Binjiang Real Estate Group Co Ltd | 2.18 | 1.17 | 0.44 |
2868.HK | Beijing Capital Land Ltd | 9.23 | 0.85 | 0.11 |
600325.SS | Huafa Industrial Co Ltd Zhuhai | 11.56 | 1.34 | 0.14 |
600466.SS | Sichuan Languang Development Co Ltd | 52.59 | 1.09 | 0.03 |
600823.SS | Shanghai Shimao Co Ltd | 17.49 | 1.13 | 0.08 |
832.HK | Central China Real Estate Ltd | 97.84 | 2.04 | 0.03 |
Low | High | |
Unlevered beta | 0.1 | 0.13 |
Relevered beta | 0.64 | 0.85 |
Adjusted relevered beta | 0.76 | 0.9 |
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 000031.SZ:
cost_of_equity (8.70%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.76) + 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.