002566.SZ WACC - Weighted Average Cost of Capital
The WACC of Jilin Jian Yisheng Pharmaceutical Co Ltd (002566.SZ) is 9.2%.
| Range | Selected | |
| Cost of equity | 8.5% - 11.5% | 10% |
| Tax rate | 14.4% - 14.8% | 14.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 7.9% - 10.4% | 9.2% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.95 | 1.1 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.5% | 11.5% |
| Tax rate | 14.4% | 14.8% |
| Debt/Equity ratio | 0.17 | 0.17 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 7.9% | 10.4% |
| Selected WACC | 9.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 002566.SZ | Jilin Jian Yisheng Pharmaceutical Co Ltd | 0.17 | 0.94 | 0.81 |
| 002728.SZ | Teyi Pharmaceutical Group Co Ltd | 0.12 | 1.03 | 0.94 |
| 002873.SZ | Guiyang Xintian Pharmaceutical Co Ltd | 0.24 | 1.3 | 1.08 |
| 300049.SZ | Inner Mongolia Furui Medical Science Co Ltd | 0.01 | 1.79 | 1.77 |
| 300086.SZ | Honz Pharmaceutical Co Ltd | 0.21 | 1.43 | 1.21 |
| 300108.SZ | Ji Yao Holding Group Co Ltd | 9.22 | 1.25 | 0.14 |
| 300583.SZ | Shandong Sito Bio-technology Co Ltd | 0.28 | 0.93 | 0.75 |
| 300584.SZ | Nanjing Hicin Pharmaceutical Co Ltd | 0.07 | 1.29 | 1.22 |
| 600080.SS | Ginwa Enterprise Group Inc | 0.08 | 0.78 | 0.73 |
| 603998.SS | Hunan Fangsheng Pharmaceutical Co Ltd | 0.17 | 0.93 | 0.81 |
| Low | High | |
| Unlevered beta | 0.81 | 1 |
| Relevered beta | 0.93 | 1.15 |
| Adjusted relevered beta | 0.95 | 1.1 |
002566.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 002566.SZ:
cost_of_equity (10.00%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.95) + 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.