The WACC of Ruitai Materials Technology Co Ltd (002066.SZ) is 6.6%.
Range | Selected | |
Cost of equity | 6.6% - 10.4% | 8.5% |
Tax rate | 12.1% - 13.6% | 12.85% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 5.6% - 7.5% | 6.6% |
Category | Low | High |
Long-term bond rate | 2.7% | 3.2% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 0.65 | 0.94 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.6% | 10.4% |
Tax rate | 12.1% | 13.6% |
Debt/Equity ratio | 0.88 | 0.88 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 5.6% | 7.5% |
Selected WACC | 6.6% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
002066.SZ | Ruitai Materials Technology Co Ltd | 0.88 | 0.76 | 0.43 |
000877.SZ | Xinjiang Tianshan Cement Co Ltd | 4.27 | 1.35 | 0.29 |
002398.SZ | Lets Holding Group Co Ltd | 0.16 | 1.34 | 1.18 |
1252.HK | China Tianrui Group Cement Co Ltd | 15.74 | 0.03 | 0 |
1847.HK | YCIH Green High Performance Concrete Co Ltd | 14.66 | 0.08 | 0.01 |
600425.SS | Xinjiang Qingsong Building Materials and Chemicals Group Co Ltd | 0.31 | 0.81 | 0.64 |
600802.SS | Fujian Cement Inc | 0.73 | 1.21 | 0.74 |
600819.SS | Shanghai Yaohua Pilkington Glass Group Co Ltd | 0.35 | 0.95 | 0.73 |
6193.HK | Tailam Tech Construction Holdings Ltd | 0 | 0.17 | 0.17 |
695.HK | Dongwu Cement International Ltd | 0.23 | 0.29 | 0.24 |
Low | High | |
Unlevered beta | 0.27 | 0.51 |
Relevered beta | 0.48 | 0.91 |
Adjusted relevered beta | 0.65 | 0.94 |
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.