000859.SZ WACC - Weighted Average Cost of Capital

The WACC of Anhui Guofeng Plastic Industry Co Ltd (000859.SZ) is 7.5%.

The Cost of Equity of Anhui Guofeng Plastic Industry Co Ltd (000859.SZ) is 7.85%.

The Cost of Debt of Anhui Guofeng Plastic Industry Co Ltd (000859.SZ) is 5.00%.

	Range	Selected
Cost of equity	5.80% - 9.90%	7.85%
Tax rate	6.30% - 8.80%	7.55%
Cost of debt	5.00% - 5.00%	5.00%
WACC	5.7% - 9.3%	7.5%

WACC

000859.SZ WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.51	0.87

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.80%	9.90%

Tax rate	6.30%	8.80%
Debt/Equity ratio	0.11	0.11
Cost of debt	5.00%	5.00%

After-tax WACC	5.7%	9.3%


Selected WACC	7.5%

000859.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 000859.SZ:

cost_of_equity (7.85%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.51) + 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.