002145.SZ WACC - Weighted Average Cost of Capital

The WACC of CNNC Hua Yuan Titanium Dioxide Co Ltd (002145.SZ) is 10.2%.

The Cost of Equity of CNNC Hua Yuan Titanium Dioxide Co Ltd (002145.SZ) is 12.40%.

The Cost of Debt of CNNC Hua Yuan Titanium Dioxide Co Ltd (002145.SZ) is 5.00%.

	Range	Selected
Cost of equity	11.10% - 13.70%	12.40%
Tax rate	15.30% - 15.70%	15.50%
Cost of debt	5.00% - 5.00%	5.00%
WACC	9.2% - 11.1%	10.2%

WACC

002145.SZ WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	6.1%	7.1%
Adjusted beta	1.37	1.41

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.10%	13.70%

Tax rate	15.30%	15.70%
Debt/Equity ratio	0.37	0.37
Cost of debt	5.00%	5.00%

After-tax WACC	9.2%	11.1%


Selected WACC	10.2%

002145.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 002145.SZ:

cost_of_equity (12.40%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.37) + 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.