000861.SZ
Guangdong Highsun Group Co Ltd
Price:  
0.62 
CNY
Volume:  
14,004,000.00
China | Real Estate Management & Development
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000861.SZ WACC - Weighted Average Cost of Capital

The WACC of Guangdong Highsun Group Co Ltd (000861.SZ) is 6.3%.

The Cost of Equity of Guangdong Highsun Group Co Ltd (000861.SZ) is 11.90%.
The Cost of Debt of Guangdong Highsun Group Co Ltd (000861.SZ) is 5.00%.

Range Selected
Cost of equity 8.40% - 15.40% 11.90%
Tax rate 5.70% - 21.70% 13.70%
Cost of debt 5.00% - 5.00% 5.00%
WACC 5.7% - 6.9% 6.3%
WACC

000861.SZ WACC calculation

Category Low High
Long-term bond rate 2.7% 3.2%
Equity market risk premium 6.1% 7.1%
Adjusted beta 0.94 1.65
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.40% 15.40%
Tax rate 5.70% 21.70%
Debt/Equity ratio 2.8 2.8
Cost of debt 5.00% 5.00%
After-tax WACC 5.7% 6.9%
Selected WACC 6.3%

000861.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 000861.SZ:

cost_of_equity (11.90%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.94) + 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.