002466.SZ WACC - Weighted Average Cost of Capital

The WACC of Tianqi Lithium Corp (002466.SZ) is 10.2%.

The Cost of Equity of Tianqi Lithium Corp (002466.SZ) is 12.35%.

The Cost of Debt of Tianqi Lithium Corp (002466.SZ) is 5.00%.

	Range	Selected
Cost of equity	10.70% - 14.00%	12.35%
Tax rate	26.40% - 31.40%	28.90%
Cost of debt	5.00% - 5.00%	5.00%
WACC	9.0% - 11.4%	10.2%

WACC

002466.SZ WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	6.1%	7.1%
Adjusted beta	1.31	1.44

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.70%	14.00%

Tax rate	26.40%	31.40%
Debt/Equity ratio	0.32	0.32
Cost of debt	5.00%	5.00%

After-tax WACC	9.0%	11.4%


Selected WACC	10.2%

002466.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 002466.SZ:

cost_of_equity (12.35%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.31) + 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.