002478.SZ WACC - Weighted Average Cost of Capital
The WACC of Jiangsu Changbao Steeltube Co Ltd (002478.SZ) is 8.2%.
| Range | Selected | |
| Cost of equity | 8.3% - 10.7% | 9.5% |
| Tax rate | 11.3% - 11.8% | 11.55% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 7.3% - 9.1% | 8.2% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.91 | 0.98 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.3% | 10.7% |
| Tax rate | 11.3% | 11.8% |
| Debt/Equity ratio | 0.33 | 0.33 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 7.3% | 9.1% |
| Selected WACC | 8.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 002478.SZ | Jiangsu Changbao Steeltube Co Ltd | 0.33 | 1.08 | 0.83 |
| 002132.SZ | Henan Hengxing Science & Technology Co Ltd | 0.77 | 1.05 | 0.62 |
| 002392.SZ | Beijing Lirr High-temperature Materials Co Ltd | 0.27 | 0.91 | 0.73 |
| 2738.HK | Huajin International Holdings Ltd | 15.87 | 0.86 | 0.06 |
| 600784.SS | Luyin Investment Group Co Ltd | 0.38 | 0.9 | 0.68 |
| 601011.SS | Baotailong New Materials Co Ltd | 0.51 | 1.13 | 0.78 |
| 603278.SS | Shandong Daye Co Ltd | 1.37 | 1.44 | 0.65 |
| 603878.SS | Jiang Su Wujin Stainless Steel Pipe Group Co Ltd | 0.29 | 1.24 | 0.98 |
| 603969.SS | Silvery Dragon Prestressed Materials Co Ltd Tianjin | 0.19 | 1.01 | 0.87 |
| 605158.SS | Zhejiang Huada New Materials Co Ltd | 1.16 | 1.34 | 0.66 |
| Low | High | |
| Unlevered beta | 0.67 | 0.75 |
| Relevered beta | 0.87 | 0.97 |
| Adjusted relevered beta | 0.91 | 0.98 |
002478.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 002478.SZ:
cost_of_equity (9.50%) = 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.