000628.SZ
Chengdu Hi-tech Development Co Ltd
Price:  
41.47 
CNY
Volume:  
3,818,365
China | Real Estate Management & Development

000628.SZ WACC - Weighted Average Cost of Capital

The WACC of Chengdu Hi-tech Development Co Ltd (000628.SZ) is 7.0%.

The Cost of Equity of Chengdu Hi-tech Development Co Ltd (000628.SZ) is 7.8%.
The Cost of Debt of Chengdu Hi-tech Development Co Ltd (000628.SZ) is 5%.

RangeSelected
Cost of equity6.3% - 9.3%7.8%
Tax rate26.5% - 32.1%29.3%
Cost of debt5.0% - 5.0%5%
WACC5.8% - 8.2%7.0%
WACC

000628.SZ WACC calculation

CategoryLowHigh
Long-term bond rate2.7%3.2%
Equity market risk premium6.1%7.1%
Adjusted beta0.590.79
Additional risk adjustments0.0%0.5%
Cost of equity6.3%9.3%
Tax rate26.5%32.1%
Debt/Equity ratio
0.220.22
Cost of debt5.0%5.0%
After-tax WACC5.8%8.2%
Selected WACC7.0%

000628.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 000628.SZ:

cost_of_equity (7.80%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.59) + 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.