002318.SZ WACC - Weighted Average Cost of Capital
The WACC of Zhejiang JIULI Hi-tech Metals Co Ltd (002318.SZ) is 8.9%.
| Range | Selected | |
| Cost of equity | 8.3% - 10.3% | 9.3% |
| Tax rate | 13.0% - 14.2% | 13.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 8.0% - 9.9% | 8.9% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.91 | 0.93 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.3% | 10.3% |
| Tax rate | 13.0% | 14.2% |
| Debt/Equity ratio | 0.08 | 0.08 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 8.0% | 9.9% |
| Selected WACC | 8.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 002318.SZ | Zhejiang JIULI Hi-tech Metals Co Ltd | 0.08 | 0.94 | 0.87 |
| 002132.SZ | Henan Hengxing Science & Technology Co Ltd | 0.85 | 1.14 | 0.66 |
| 002392.SZ | Beijing Lirr High-temperature Materials Co Ltd | 0.25 | 0.97 | 0.8 |
| 002478.SZ | Jiangsu Changbao Steeltube Co Ltd | 0.34 | 1.12 | 0.87 |
| 002545.SZ | Qingdao East Steel Tower Stock Co Ltd | 0.21 | 0.96 | 0.82 |
| 002756.SZ | Yongxing Special Materials Technology Co Ltd | 0.01 | 1.34 | 1.33 |
| 600740.SS | ShanXi Coking Co Ltd | 1.15 | 1.14 | 0.57 |
| 601011.SS | Baotailong New Materials Co Ltd | 0.4 | 1.21 | 0.9 |
| 605158.SS | Zhejiang Huada New Materials Co Ltd | 0.79 | 1.39 | 0.82 |
| 826.HK | Tiangong International Co Ltd | 0.7 | 0.78 | 0.49 |
| Low | High | |
| Unlevered beta | 0.81 | 0.84 |
| Relevered beta | 0.87 | 0.9 |
| Adjusted relevered beta | 0.91 | 0.93 |
002318.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 002318.SZ:
cost_of_equity (9.30%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.91) + 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.