000538.SZ WACC - Weighted Average Cost of Capital
The WACC of Yunnan Baiyao Group Co Ltd (000538.SZ) is 9.5%.
| Range | Selected | |
| Cost of equity | 8.3% - 10.9% | 9.6% |
| Tax rate | 16.0% - 17.3% | 16.65% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 8.2% - 10.7% | 9.5% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.92 | 1.02 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.3% | 10.9% |
| Tax rate | 16.0% | 17.3% |
| Debt/Equity ratio | 0.03 | 0.03 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 8.2% | 10.7% |
| Selected WACC | 9.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 000538.SZ | Yunnan Baiyao Group Co Ltd | 0.03 | 0.82 | 0.8 |
| 000661.SZ | Changchun High & New Technology Industries Group Inc | 0.04 | 1.49 | 1.44 |
| 002001.SZ | Zhejiang Nhu Co Ltd | 0.14 | 0.7 | 0.63 |
| 002821.SZ | Asymchem Laboratories Tianjin Co Ltd | 0.01 | 1.42 | 1.41 |
| 1093.HK | CSPC Pharmaceutical Group Ltd | 0.01 | 0.9 | 0.89 |
| 3692.HK | Hansoh Pharmaceutical Group Co Ltd | 0 | 0.4 | 0.4 |
| 600079.SS | Humanwell Healthcare Group Co Ltd | 0.27 | 1.12 | 0.91 |
| 600085.SS | Beijing Tongrentang Co Ltd | 0.11 | 1.32 | 1.22 |
| 600196.SS | Shanghai Fosun Pharmaceutical Group Co Ltd | 0.53 | 0.98 | 0.68 |
| 600436.SS | Zhangzhou Pientzehuang Pharmaceutical Ltd | 0.01 | 1.15 | 1.14 |
| Low | High | |
| Unlevered beta | 0.86 | 1 |
| Relevered beta | 0.88 | 1.03 |
| Adjusted relevered beta | 0.92 | 1.02 |
000538.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 000538.SZ:
cost_of_equity (9.60%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.92) + 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.