002562.SZ
Brother Enterprises Holding Co Ltd
Price:  
4.51 
CNY
Volume:  
39,748,070
China | Chemicals

002562.SZ WACC - Weighted Average Cost of Capital

The WACC of Brother Enterprises Holding Co Ltd (002562.SZ) is 10.7%.

The Cost of Equity of Brother Enterprises Holding Co Ltd (002562.SZ) is 13.2%.
The Cost of Debt of Brother Enterprises Holding Co Ltd (002562.SZ) is 5%.

RangeSelected
Cost of equity11.3% - 15.1%13.2%
Tax rate15.4% - 19.4%17.4%
Cost of debt5.0% - 5.0%5%
WACC9.3% - 12.1%10.7%
WACC

002562.SZ WACC calculation

CategoryLowHigh
Long-term bond rate2.7%3.2%
Equity market risk premium6.1%7.1%
Adjusted beta1.41.6
Additional risk adjustments0.0%0.5%
Cost of equity11.3%15.1%
Tax rate15.4%19.4%
Debt/Equity ratio
0.380.38
Cost of debt5.0%5.0%
After-tax WACC9.3%12.1%
Selected WACC10.7%

002562.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 002562.SZ:

cost_of_equity (13.20%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.4) + 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.