000552.SZ WACC - Weighted Average Cost of Capital

The WACC of Gansu Jingyuan Coal Industry and Electricity Power Co Ltd (000552.SZ) is 8.7%.

The Cost of Equity of Gansu Jingyuan Coal Industry and Electricity Power Co Ltd (000552.SZ) is 11.50%.

The Cost of Debt of Gansu Jingyuan Coal Industry and Electricity Power Co Ltd (000552.SZ) is 5.00%.

	Range	Selected
Cost of equity	10.10% - 12.90%	11.50%
Tax rate	16.40% - 17.40%	16.90%
Cost of debt	5.00% - 5.00%	5.00%
WACC	7.9% - 9.6%	8.7%

WACC

000552.SZ WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	6.1%	7.1%
Adjusted beta	1.21	1.29

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.10%	12.90%

Tax rate	16.40%	17.40%
Debt/Equity ratio	0.61	0.61
Cost of debt	5.00%	5.00%

After-tax WACC	7.9%	9.6%


Selected WACC	8.7%

000552.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 000552.SZ:

cost_of_equity (11.50%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.21) + 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.