002630.SZ WACC - Weighted Average Cost of Capital
The WACC of China Western Power Industrial Co Ltd (002630.SZ) is 8.1%.
| Range | Selected | |
| Cost of equity | 10.4% - 17.5% | 13.95% |
| Tax rate | 13.0% - 14.0% | 13.5% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.7% - 9.5% | 8.1% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1.26 | 1.94 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.4% | 17.5% |
| Tax rate | 13.0% | 14.0% |
| Debt/Equity ratio | 1.56 | 1.56 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.7% | 9.5% |
| Selected WACC | 8.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 002630.SZ | China Western Power Industrial Co Ltd | 1.56 | 0.93 | 0.4 |
| 000551.SZ | Create Technology & Science Co Ltd | 0.13 | 0.97 | 0.88 |
| 002009.SZ | Miracle Automation Engineering Co Ltd | 0.35 | 1.7 | 1.3 |
| 002527.SZ | Shanghai STEP Electric Corp | 0.15 | 1.49 | 1.31 |
| 002786.SZ | Shenzhen Silver Basis Technology Co Ltd | 0.23 | 0.85 | 0.71 |
| 1651.HK | Precision Tsugami (China) Corporation Ltd | 0 | 0.57 | 0.57 |
| 200706.SZ | Wafangdian Bearing Co Ltd | 1.18 | 0.08 | 0.04 |
| 2060.HK | Pujiang International Group Ltd | 15.33 | 0.21 | 0.02 |
| 300230.SZ | Shanghai YongLi Belting Co Ltd | 0.17 | 1.62 | 1.42 |
| 600843.SS | Shang Gong Group Co Ltd | 0.22 | 1.49 | 1.25 |
| Low | High | |
| Unlevered beta | 0.65 | 1.03 |
| Relevered beta | 1.39 | 2.4 |
| Adjusted relevered beta | 1.26 | 1.94 |
002630.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 002630.SZ:
cost_of_equity (13.95%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.26) + 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.