002131.SZ
Leo Group Co Ltd
Price:  
3.94 
CNY
Volume:  
775,955,100.00
China | Media
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002131.SZ WACC - Weighted Average Cost of Capital

The WACC of Leo Group Co Ltd (002131.SZ) is 10.8%.

The Cost of Equity of Leo Group Co Ltd (002131.SZ) is 12.10%.
The Cost of Debt of Leo Group Co Ltd (002131.SZ) is 5.00%.

Range Selected
Cost of equity 10.60% - 13.60% 12.10%
Tax rate 23.40% - 24.90% 24.15%
Cost of debt 5.00% - 5.00% 5.00%
WACC 9.6% - 12.1% 10.8%
WACC

002131.SZ WACC calculation

Category Low High
Long-term bond rate 2.7% 3.2%
Equity market risk premium 6.1% 7.1%
Adjusted beta 1.3 1.39
Additional risk adjustments 0.0% 0.5%
Cost of equity 10.60% 13.60%
Tax rate 23.40% 24.90%
Debt/Equity ratio 0.18 0.18
Cost of debt 5.00% 5.00%
After-tax WACC 9.6% 12.1%
Selected WACC 10.8%

002131.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 002131.SZ:

cost_of_equity (12.10%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.3) + 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.