000965.SZ WACC - Weighted Average Cost of Capital

The WACC of Tianjin Tianbao Infrastructure Co Ltd (000965.SZ) is 9.1%.

The Cost of Equity of Tianjin Tianbao Infrastructure Co Ltd (000965.SZ) is 12.95%.

The Cost of Debt of Tianjin Tianbao Infrastructure Co Ltd (000965.SZ) is 5.00%.

	Range	Selected
Cost of equity	11.10% - 14.80%	12.95%
Tax rate	25.00% - 25.00%	25.00%
Cost of debt	5.00% - 5.00%	5.00%
WACC	8.0% - 10.2%	9.1%

WACC

000965.SZ WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	6.1%	7.1%
Adjusted beta	1.38	1.57

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.10%	14.80%

Tax rate	25.00%	25.00%
Debt/Equity ratio	0.72	0.72
Cost of debt	5.00%	5.00%

After-tax WACC	8.0%	10.2%


Selected WACC	9.1%

000965.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 000965.SZ:

cost_of_equity (12.95%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.38) + 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.