000598.SZ
Chengdu Xingrong Environment Co Ltd
Price:  
7.10 
CNY
Volume:  
22,113,356.00
China | Water Utilities
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000598.SZ WACC - Weighted Average Cost of Capital

The WACC of Chengdu Xingrong Environment Co Ltd (000598.SZ) is 6.7%.

The Cost of Equity of Chengdu Xingrong Environment Co Ltd (000598.SZ) is 8.70%.
The Cost of Debt of Chengdu Xingrong Environment Co Ltd (000598.SZ) is 5.00%.

Range Selected
Cost of equity 7.40% - 10.00% 8.70%
Tax rate 14.40% - 14.90% 14.65%
Cost of debt 5.00% - 5.00% 5.00%
WACC 6.0% - 7.4% 6.7%
WACC

000598.SZ WACC calculation

Category Low High
Long-term bond rate 2.7% 3.2%
Equity market risk premium 6.1% 7.1%
Adjusted beta 0.78 0.89
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.40% 10.00%
Tax rate 14.40% 14.90%
Debt/Equity ratio 0.84 0.84
Cost of debt 5.00% 5.00%
After-tax WACC 6.0% 7.4%
Selected WACC 6.7%

000598.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 000598.SZ:

cost_of_equity (8.70%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.78) + 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.