002066.SZ
Ruitai Materials Technology Co Ltd
Price:  
12 
CNY
Volume:  
3,001,500
China | Construction Materials

002066.SZ WACC - Weighted Average Cost of Capital

The WACC of Ruitai Materials Technology Co Ltd (002066.SZ) is 6.6%.

The Cost of Equity of Ruitai Materials Technology Co Ltd (002066.SZ) is 8.5%.
The Cost of Debt of Ruitai Materials Technology Co Ltd (002066.SZ) is 5%.

RangeSelected
Cost of equity6.6% - 10.4%8.5%
Tax rate12.1% - 13.6%12.85%
Cost of debt5.0% - 5.0%5%
WACC5.6% - 7.5%6.6%
WACC

002066.SZ WACC calculation

CategoryLowHigh
Long-term bond rate2.7%3.2%
Equity market risk premium6.1%7.1%
Adjusted beta0.650.94
Additional risk adjustments0.0%0.5%
Cost of equity6.6%10.4%
Tax rate12.1%13.6%
Debt/Equity ratio
0.880.88
Cost of debt5.0%5.0%
After-tax WACC5.6%7.5%
Selected WACC6.6%

002066.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 002066.SZ:

cost_of_equity (8.50%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.65) + 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.