002263.SZ WACC - Weighted Average Cost of Capital

The WACC of Zhejiang Great Southeast CorpLtd (002263.SZ) is 9.7%.

The Cost of Equity of Zhejiang Great Southeast CorpLtd (002263.SZ) is 14.90%.

The Cost of Debt of Zhejiang Great Southeast CorpLtd (002263.SZ) is 5.00%.

	Range	Selected
Cost of equity	11.90% - 17.90%	14.90%
Tax rate	10.60% - 12.00%	11.30%
Cost of debt	5.00% - 5.00%	5.00%
WACC	8.2% - 11.2%	9.7%

WACC

002263.SZ WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	6.1%	7.1%
Adjusted beta	1.5	2

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.90%	17.90%

Tax rate	10.60%	12.00%
Debt/Equity ratio	1	1
Cost of debt	5.00%	5.00%

After-tax WACC	8.2%	11.2%


Selected WACC	9.7%

002263.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 002263.SZ:

cost_of_equity (14.90%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.5) + 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.