000615.SZ
Aoyuan Beauty Valley Technology Co Ltd
Price:  
3.19 
CNY
Volume:  
7,205,004
China | Real Estate Management & Development

000615.SZ WACC - Weighted Average Cost of Capital

The WACC of Aoyuan Beauty Valley Technology Co Ltd (000615.SZ) is 6.5%.

The Cost of Equity of Aoyuan Beauty Valley Technology Co Ltd (000615.SZ) is 7.35%.
The Cost of Debt of Aoyuan Beauty Valley Technology Co Ltd (000615.SZ) is 5%.

RangeSelected
Cost of equity5.9% - 8.8%7.35%
Tax rate4.3% - 9.1%6.7%
Cost of debt5.0% - 5.0%5%
WACC5.5% - 7.4%6.5%
WACC

000615.SZ WACC calculation

CategoryLowHigh
Long-term bond rate2.7%3.2%
Equity market risk premium6.1%7.1%
Adjusted beta0.530.71
Additional risk adjustments0.0%0.5%
Cost of equity5.9%8.8%
Tax rate4.3%9.1%
Debt/Equity ratio
0.470.47
Cost of debt5.0%5.0%
After-tax WACC5.5%7.4%
Selected WACC6.5%

000615.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 000615.SZ:

cost_of_equity (7.35%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.53) + 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.