000758.SZ WACC - Weighted Average Cost of Capital

The WACC of China Nonferrous Metal Industry's Foreign Engineering and Construction Co Ltd (000758.SZ) is 8.1%.

The Cost of Equity of China Nonferrous Metal Industry's Foreign Engineering and Construction Co Ltd (000758.SZ) is 11.05%.

The Cost of Debt of China Nonferrous Metal Industry's Foreign Engineering and Construction Co Ltd (000758.SZ) is 5.00%.

	Range	Selected
Cost of equity	9.60% - 12.50%	11.05%
Tax rate	26.90% - 34.50%	30.70%
Cost of debt	5.00% - 5.00%	5.00%
WACC	7.3% - 8.9%	8.1%

WACC

000758.SZ WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	6.1%	7.1%
Adjusted beta	1.14	1.24

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.60%	12.50%

Tax rate	26.90%	34.50%
Debt/Equity ratio	0.63	0.63
Cost of debt	5.00%	5.00%

After-tax WACC	7.3%	8.9%


Selected WACC	8.1%

000758.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 000758.SZ:

cost_of_equity (11.05%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.14) + 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.