000959.SZ WACC - Weighted Average Cost of Capital
The WACC of Beijing Shougang Co Ltd (000959.SZ) is 6.6%.
| Range | Selected | |
| Cost of equity | 8.7% - 12.2% | 10.45% |
| Tax rate | 15.5% - 16.0% | 15.75% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.9% - 7.2% | 6.6% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.98 | 1.19 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.7% | 12.2% |
| Tax rate | 15.5% | 16.0% |
| Debt/Equity ratio | 1.63 | 1.63 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.9% | 7.2% |
| Selected WACC | 6.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 000959.SZ | Beijing Shougang Co Ltd | 1.63 | 1.18 | 0.5 |
| 000709.SZ | HBIS Co Ltd | 7.19 | 1.26 | 0.18 |
| 000825.SZ | Shanxi Taigang Stainless Steel Co Ltd | 1.05 | 1.34 | 0.71 |
| 1090.HK | Da Ming International Holdings Ltd | 10.36 | 0.35 | 0.04 |
| 600022.SS | Shandong Iron and Steel Co Ltd | 1.45 | 1.14 | 0.51 |
| 600307.SS | Gansu Jiu Steel Group Hongxing Iron & Steel Co Ltd | 3.52 | 0.9 | 0.23 |
| 600782.SS | Xinyu Iron & Steel Co Ltd | 1.28 | 1.49 | 0.72 |
| 600808.SS | Maanshan Iron & Steel Co Ltd | 1.39 | 1.28 | 0.59 |
| 600985.SS | Huaibei Mining Holdings Co Ltd | 0.31 | 1.18 | 0.94 |
| 601003.SS | Liuzhou Iron & Steel Co Ltd | 3.84 | 1.13 | 0.27 |
| Low | High | |
| Unlevered beta | 0.41 | 0.55 |
| Relevered beta | 0.97 | 1.28 |
| Adjusted relevered beta | 0.98 | 1.19 |
000959.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 000959.SZ:
cost_of_equity (10.45%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.98) + 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.