002037.SZ WACC - Weighted Average Cost of Capital

The WACC of Poly Union Chemical Holding Group Co Ltd (002037.SZ) is 6.9%.

The Cost of Equity of Poly Union Chemical Holding Group Co Ltd (002037.SZ) is 13.40%.

The Cost of Debt of Poly Union Chemical Holding Group Co Ltd (002037.SZ) is 5.00%.

	Range	Selected
Cost of equity	11.90% - 14.90%	13.40%
Tax rate	16.20% - 28.90%	22.55%
Cost of debt	5.00% - 5.00%	5.00%
WACC	6.6% - 7.1%	6.9%

WACC

002037.SZ WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	6.1%	7.1%
Adjusted beta	1.5	1.57

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.90%	14.90%

Tax rate	16.20%	28.90%
Debt/Equity ratio	2.16	2.16
Cost of debt	5.00%	5.00%

After-tax WACC	6.6%	7.1%


Selected WACC	6.9%

002037.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 002037.SZ:

cost_of_equity (13.40%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.5) + 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.