000544.SZ WACC - Weighted Average Cost of Capital
The WACC of Central Plains Environment Protection Co Ltd (000544.SZ) is 7.2%.
| Range | Selected | |
| Cost of equity | 13.0% - 18.0% | 15.5% |
| Tax rate | 12.4% - 14.9% | 13.65% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.6% - 7.8% | 7.2% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1.69 | 2.01 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 13.0% | 18.0% |
| Tax rate | 12.4% | 14.9% |
| Debt/Equity ratio | 2.9 | 2.9 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.6% | 7.8% |
| Selected WACC | 7.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 000544.SZ | Central Plains Environment Protection Co Ltd | 2.9 | 0.99 | 0.28 |
| 300664.SZ | Penyao Environmental Protection Co Ltd | 0.43 | 1.13 | 0.82 |
| 300867.SZ | Shengyuan Environmental Protection Co Ltd | 0.81 | 0.88 | 0.52 |
| 600217.SS | China Resources and Environment Co Ltd | 0.51 | 1.24 | 0.86 |
| 600874.SS | Tianjin Capital Environmental Protection Group Co Ltd | 1.06 | 0.94 | 0.49 |
| 603797.SS | Guangdong Liantai Environmental Protection Co Ltd | 2.11 | 1.09 | 0.39 |
| 603817.SS | Fujian Haixia Environmental Protection Group Co Ltd | 0.55 | 0.92 | 0.62 |
| 603903.SS | CSD Water Service Co Ltd | 0.89 | 1.14 | 0.65 |
| 688101.SS | Suntar Environmental Technology Co Ltd | 0.04 | 1.09 | 1.05 |
| 688178.SS | Nanjing Wondux Environmental Protection Technology Corp Ltd | 0.27 | 1.38 | 1.11 |
| Low | High | |
| Unlevered beta | 0.58 | 0.72 |
| Relevered beta | 2.03 | 2.51 |
| Adjusted relevered beta | 1.69 | 2.01 |
000544.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 000544.SZ:
cost_of_equity (15.50%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.69) + 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.