000899.SZ WACC - Weighted Average Cost of Capital

The WACC of Jiangxi Ganneng Co Ltd (000899.SZ) is 6.9%.

The Cost of Equity of Jiangxi Ganneng Co Ltd (000899.SZ) is 9.25%.

The Cost of Debt of Jiangxi Ganneng Co Ltd (000899.SZ) is 5.00%.

	Range	Selected
Cost of equity	7.40% - 11.10%	9.25%
Tax rate	0.50% - 5.10%	2.80%
Cost of debt	5.00% - 5.00%	5.00%
WACC	6.1% - 7.7%	6.9%

WACC

000899.SZ WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.77	1.05

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.40%	11.10%

Tax rate	0.50%	5.10%
Debt/Equity ratio	1.16	1.16
Cost of debt	5.00%	5.00%

After-tax WACC	6.1%	7.7%


Selected WACC	6.9%

000899.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 000899.SZ:

cost_of_equity (9.25%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.77) + 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.