002567.SZ WACC - Weighted Average Cost of Capital
The WACC of Tangrenshen Group Co Ltd (002567.SZ) is 7.4%.
| Range | Selected | |
| Cost of equity | 8.8% - 11.8% | 10.3% |
| Tax rate | 2.4% - 3.5% | 2.95% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.7% - 8.1% | 7.4% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1 | 1.13 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.8% | 11.8% |
| Tax rate | 2.4% | 3.5% |
| Debt/Equity ratio | 1.1 | 1.1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.7% | 8.1% |
| Selected WACC | 7.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 002567.SZ | Tangrenshen Group Co Ltd | 1.1 | 1.21 | 0.58 |
| 000019.SZ | Shenzhen Cereals Holdings Co Ltd | 0.19 | 0.75 | 0.63 |
| 000911.SZ | Nanning Sugar Industry Co Ltd | 1.25 | 0.66 | 0.3 |
| 002726.SZ | Shandong Longda Meat Foodstuff Co Ltd | 0.51 | 0.89 | 0.59 |
| 1068.HK | China Yurun Food Group Ltd | 1.73 | 1.39 | 0.52 |
| 1230.HK | Yashili International Holdings Ltd | 0.11 | 0.07 | 0.07 |
| 1717.HK | Ausnutria Dairy Corp Ltd | 0.72 | 0.73 | 0.43 |
| 3999.HK | Dachan Food (Asia) Ltd | 1 | 0.1 | 0.05 |
| 600737.SS | COFCO Sugar Holding Co Ltd | 0.23 | 0.7 | 0.58 |
| 600873.SS | MeiHua Holdings Group Co Ltd | 0.17 | 0.86 | 0.74 |
| Low | High | |
| Unlevered beta | 0.48 | 0.58 |
| Relevered beta | 1 | 1.19 |
| Adjusted relevered beta | 1 | 1.13 |
002567.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 002567.SZ:
cost_of_equity (10.30%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1) + 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.