The WACC of Fujian SBS Zipper Science and Technology Co Ltd (002098.SZ) is 8.8%.
Range | Selected | |
Cost of equity | 7.5% - 10.7% | 9.1% |
Tax rate | 12.5% - 14.4% | 13.45% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 7.3% - 10.2% | 8.8% |
Category | Low | High |
Long-term bond rate | 2.7% | 3.2% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 0.79 | 0.99 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 7.5% | 10.7% |
Tax rate | 12.5% | 14.4% |
Debt/Equity ratio | 0.08 | 0.08 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 7.3% | 10.2% |
Selected WACC | 8.8% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
002098.SZ | Fujian SBS Zipper Science and Technology Co Ltd | 0.08 | 1.11 | 1.04 |
002687.SZ | Zhejiang Giuseppe Garment Co Ltd | 0.04 | 1.23 | 1.19 |
002731.SZ | Shenyang Cuihua Gold and Silver Jewelry Co Ltd | 0.65 | 1.05 | 0.67 |
003016.SZ | Xin Hee Co Ltd | 0.13 | 0.93 | 0.84 |
600146.SS | Shangying Global Co Ltd | 2.51 | 1.4 | 0.44 |
603196.SS | Ribo Fashion Group Co Ltd | 0.04 | 1.89 | 1.83 |
603555.SS | Guirenniao Co Ltd | 0.79 | 1.03 | 0.61 |
603558.SS | Zhejiang Jasan Holding Group Co Ltd | 0.31 | 0.49 | 0.39 |
603839.SS | Anzheng Fashion Group Co Ltd | 0.08 | 1.11 | 1.04 |
8404.TW | Paiho Shih Holdings Corp | 1.15 | 1.03 | 0.52 |
Low | High | |
Unlevered beta | 0.65 | 0.92 |
Relevered beta | 0.69 | 0.99 |
Adjusted relevered beta | 0.79 | 0.99 |
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 002098.SZ:
cost_of_equity (9.10%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.79) + 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.