000869.SZ WACC - Weighted Average Cost of Capital

The WACC of Yantai Changyu Pioneer Wine Co Ltd (000869.SZ) is 12.5%.

The Cost of Equity of Yantai Changyu Pioneer Wine Co Ltd (000869.SZ) is 13.00%.

The Cost of Debt of Yantai Changyu Pioneer Wine Co Ltd (000869.SZ) is 5.00%.

	Range	Selected
Cost of equity	11.50% - 14.50%	13.00%
Tax rate	29.10% - 29.40%	29.25%
Cost of debt	5.00% - 5.00%	5.00%
WACC	11.2% - 13.9%	12.5%

WACC

000869.SZ WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	6.1%	7.1%
Adjusted beta	1.45	1.51

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.50%	14.50%

Tax rate	29.10%	29.40%
Debt/Equity ratio	0.05	0.05
Cost of debt	5.00%	5.00%

After-tax WACC	11.2%	13.9%


Selected WACC	12.5%

000869.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 000869.SZ:

cost_of_equity (13.00%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.45) + 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.