The WACC of Jiugui Liquor Co Ltd (000799.SZ) is 11.1%.
Range | Selected | |
Cost of equity | 9.0% - 13.2% | 11.1% |
Tax rate | 24.8% - 24.9% | 24.85% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 8.9% - 13.2% | 11.1% |
Category | Low | High |
Long-term bond rate | 2.7% | 3.2% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 1.03 | 1.34 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 9.0% | 13.2% |
Tax rate | 24.8% | 24.9% |
Debt/Equity ratio | 0 | 0 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 8.9% | 13.2% |
Selected WACC | 11.1% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
000799.SZ | Jiugui Liquor Co Ltd | 0 | 1.86 | 1.85 |
002568.SZ | Shanghai Bairun Investment Holding Group Co Ltd | 0.09 | 1.66 | 1.56 |
600365.SS | Tonghua Grape Wine Co Ltd | 0.22 | 0.64 | 0.55 |
600543.SS | Gansu Mogao Industrial Development Co Ltd | 0.03 | 0.23 | 0.22 |
600779.SS | Sichuan Swellfun Co Ltd | 0 | 1.9 | 1.9 |
603198.SS | Anhui Yingjia Distillery Co Ltd | 0.02 | 1.7 | 1.67 |
603369.SS | Jiangsu King's Luck Brewery Joint-Stock Co Ltd | 0.04 | 1.52 | 1.48 |
603589.SS | Anhui Kouzi Distillery Co Ltd | 0.02 | 1.38 | 1.36 |
8146.HK | Grace Wine Holdings Ltd | 0.74 | -0.24 | -0.15 |
BKV.SI | Dukang Distillers Holdings Ltd | 0.37 | -0.64 | -0.5 |
Low | High | |
Unlevered beta | 1.04 | 1.51 |
Relevered beta | 1.04 | 1.51 |
Adjusted relevered beta | 1.03 | 1.34 |
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 000799.SZ:
cost_of_equity (11.10%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.03) + 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.