002037.SZ
Poly Union Chemical Holding Group Co Ltd
Price:  
9.06 
CNY
Volume:  
13,712,702.00
China | Chemicals
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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.