000601.SZ
Guangdong Shaoneng Group Co Ltd
Price:  
6.08 
CNY
Volume:  
100,855,010.00
China | Independent Power and Renewable Electricity Producers
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000601.SZ WACC - Weighted Average Cost of Capital

The WACC of Guangdong Shaoneng Group Co Ltd (000601.SZ) is 6.8%.

The Cost of Equity of Guangdong Shaoneng Group Co Ltd (000601.SZ) is 10.75%.
The Cost of Debt of Guangdong Shaoneng Group Co Ltd (000601.SZ) is 5.00%.

Range Selected
Cost of equity 9.40% - 12.10% 10.75%
Tax rate 22.30% - 39.20% 30.75%
Cost of debt 5.00% - 5.00% 5.00%
WACC 6.5% - 7.2% 6.8%
WACC

000601.SZ WACC calculation

Category Low High
Long-term bond rate 2.7% 3.2%
Equity market risk premium 6.1% 7.1%
Adjusted beta 1.1 1.18
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.40% 12.10%
Tax rate 22.30% 39.20%
Debt/Equity ratio 1.15 1.15
Cost of debt 5.00% 5.00%
After-tax WACC 6.5% 7.2%
Selected WACC 6.8%

000601.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 000601.SZ:

cost_of_equity (10.75%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.1) + 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.