000776.SZ WACC - Weighted Average Cost of Capital

The WACC of GF Securities Co Ltd (000776.SZ) is 6.3%.

The Cost of Equity of GF Securities Co Ltd (000776.SZ) is 12.25%.

The Cost of Debt of GF Securities Co Ltd (000776.SZ) is 5.00%.

	Range	Selected
Cost of equity	10.80% - 13.70%	12.25%
Tax rate	13.00% - 16.40%	14.70%
Cost of debt	5.00% - 5.00%	5.00%
WACC	6.0% - 6.6%	6.3%

WACC

000776.SZ WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	6.1%	7.1%
Adjusted beta	1.32	1.41

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.80%	13.70%

Tax rate	13.00%	16.40%
Debt/Equity ratio	2.95	2.95
Cost of debt	5.00%	5.00%

After-tax WACC	6.0%	6.6%


Selected WACC	6.3%

000776.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 000776.SZ:

cost_of_equity (12.25%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.32) + 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.