000679.SZ WACC - Weighted Average Cost of Capital
The WACC of Dalian Friendship Group Co Ltd (000679.SZ) is 6.3%.
| Range | Selected | |
| Cost of equity | 5.4% - 7.9% | 6.65% |
| Tax rate | 0.2% - 2.8% | 1.5% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.3% - 7.3% | 6.3% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.44 | 0.59 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.4% | 7.9% |
| Tax rate | 0.2% | 2.8% |
| Debt/Equity ratio | 0.23 | 0.23 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.3% | 7.3% |
| Selected WACC | 6.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 000679.SZ | Dalian Friendship Group Co Ltd | 0.23 | 0.53 | 0.43 |
| 002561.SZ | Shanghai Xujiahui Commercial Co Ltd | 0.03 | 1.27 | 1.24 |
| 3308.HK | Golden Eagle Retail Group Ltd | 0.71 | 0.04 | 0.02 |
| 3368.HK | PARKSON Retail Group Ltd | 28.48 | 0.93 | 0.03 |
| 600306.SS | Shenyang Commercial City Co Ltd | 1.47 | -0.98 | -0.4 |
| 600712.SS | Nanning Department Store Co Ltd | 0.11 | 0.88 | 0.79 |
| 600821.SS | Tianjin Quanyechang Group Co Ltd | 2.52 | 0.88 | 0.25 |
| 600824.SS | Shanghai Yimin Commercial Group Co Ltd | 0.02 | 0.44 | 0.44 |
| 603101.SS | Xinjiang Wuika Times Department Store Co Ltd | 0.44 | 0.28 | 0.19 |
| 848.HK | Maoye International Holdings Ltd | 20.87 | 1.2 | 0.05 |
| Low | High | |
| Unlevered beta | 0.14 | 0.32 |
| Relevered beta | 0.16 | 0.39 |
| Adjusted relevered beta | 0.44 | 0.59 |
000679.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 000679.SZ:
cost_of_equity (6.65%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.44) + 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.