000952.SZ WACC - Weighted Average Cost of Capital
The WACC of Hubei Guangji Pharmaceutical Co Ltd (000952.SZ) is 7.9%.
| Range | Selected | |
| Cost of equity | 8.4% - 11.4% | 9.9% |
| Tax rate | 12.3% - 17.0% | 14.65% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 7.0% - 8.8% | 7.9% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.93 | 1.09 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.4% | 11.4% |
| Tax rate | 12.3% | 17.0% |
| Debt/Equity ratio | 0.56 | 0.56 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 7.0% | 8.8% |
| Selected WACC | 7.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 000952.SZ | Hubei Guangji Pharmaceutical Co Ltd | 0.56 | 0.77 | 0.52 |
| 000790.SZ | Chengdu Huasun Technology Group Co Ltd | 0.23 | 1.16 | 0.97 |
| 002198.SZ | Guangdong Jiaying Pharmaceutical Co Ltd | 0 | 0.8 | 0.8 |
| 002370.SZ | Zhejiang Yatai Pharmaceutical Co Ltd | 0.11 | 1.45 | 1.33 |
| 1652.HK | Fusen Pharmaceutical Co Ltd | 1.5 | -0.19 | -0.08 |
| 300049.SZ | Inner Mongolia Furui Medical Science Co Ltd | 0.01 | 1.8 | 1.78 |
| 300108.SZ | Ji Yao Holding Group Co Ltd | 9.22 | 1.25 | 0.14 |
| 600080.SS | Ginwa Enterprise Group Inc | 0.08 | 0.79 | 0.75 |
| 603079.SS | Zhejiang Shengda Bio-Pharm Co Ltd | 0.11 | 0.6 | 0.55 |
| 603139.SS | Shaanxi Kanghui Pharmaceutical Co Ltd | 0.28 | 0.81 | 0.65 |
| Low | High | |
| Unlevered beta | 0.61 | 0.77 |
| Relevered beta | 0.9 | 1.13 |
| Adjusted relevered beta | 0.93 | 1.09 |
000952.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 000952.SZ:
cost_of_equity (9.90%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.93) + 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.