000778.SZ WACC - Weighted Average Cost of Capital
The WACC of Xinxing Ductile Iron Pipes Co Ltd (000778.SZ) is 5.9%.
| Range | Selected | |
| Cost of equity | 7.1% - 9.5% | 8.3% |
| Tax rate | 21.9% - 26.6% | 24.25% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.4% - 6.3% | 5.9% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.72 | 0.82 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.1% | 9.5% |
| Tax rate | 21.9% | 26.6% |
| Debt/Equity ratio | 1.18 | 1.18 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.4% | 6.3% |
| Selected WACC | 5.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 000778.SZ | Xinxing Ductile Iron Pipes Co Ltd | 1.18 | 1.02 | 0.54 |
| 002110.SZ | Sansteel Minguang Co Ltd Fujian | 2.71 | 1.52 | 0.51 |
| 1090.HK | Da Ming International Holdings Ltd | 10.36 | 0.35 | 0.04 |
| 1266.HK | Xiwang Special Steel Co Ltd | 204.75 | 0.97 | 0.01 |
| 600282.SS | Nanjing Iron & Steel Co Ltd | 1.03 | 0.77 | 0.44 |
| 600307.SS | Gansu Jiu Steel Group Hongxing Iron & Steel Co Ltd | 3.52 | 0.9 | 0.25 |
| 600569.SS | AnYang lron & Steel lnc | 3.03 | 1.18 | 0.36 |
| 600581.SS | Xinjiang Ba Yi Iron & Steel Co Ltd | 3.71 | 1.22 | 0.33 |
| 601003.SS | Liuzhou Iron & Steel Co Ltd | 3.84 | 1.13 | 0.29 |
| 601686.SS | Tianjin You Fa Steel Pipe Group Stock Co Ltd | 1.03 | 0.75 | 0.43 |
| Low | High | |
| Unlevered beta | 0.31 | 0.39 |
| Relevered beta | 0.58 | 0.73 |
| Adjusted relevered beta | 0.72 | 0.82 |
000778.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 000778.SZ:
cost_of_equity (8.30%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.72) + 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.