002672.SZ WACC - Weighted Average Cost of Capital
The WACC of Dongjiang Environmental Co Ltd (002672.SZ) is 6.2%.
| Range | Selected | |
| Cost of equity | 5.8% - 10.0% | 7.9% |
| Tax rate | 3.2% - 9.6% | 6.4% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.3% - 7.1% | 6.2% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.5 | 0.89 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.8% | 10.0% |
| Tax rate | 3.2% | 9.6% |
| Debt/Equity ratio | 1.16 | 1.16 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.3% | 7.1% |
| Selected WACC | 6.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 002672.SZ | Dongjiang Environmental Co Ltd | 1.16 | 1.29 | 0.61 |
| 002973.SZ | QiaoYin City Management Co Ltd | 0.77 | 1.3 | 0.75 |
| 1253.HK | China Greenland Broad Greenstate Group Co Ltd | 8.57 | 1.03 | 0.11 |
| 1845.HK | Weigang Environmental Technology Holding Group Ltd | 0.48 | -0.14 | -0.1 |
| 300355.SZ | Inner Mongolia M-Grass Ecology and Environment Group Co Ltd | 0.94 | 0.99 | 0.52 |
| 3718.HK | Beijing Enterprises Urban Resources Group Ltd | 2.27 | 0.25 | 0.08 |
| 601330.SS | Dynagreen Environmental Protection Group Co Ltd | 1.18 | 0.88 | 0.41 |
| 601827.SS | Chongqing Sanfeng Environment Group Corp Ltd | 0.53 | 0.59 | 0.39 |
| 603603.SS | Poten Environment Group Co Ltd | 6.92 | 0.5 | 0.07 |
| LS9.SI | Leader Environmental Technologies Ltd | 0.34 | 0.17 | 0.13 |
| Low | High | |
| Unlevered beta | 0.12 | 0.4 |
| Relevered beta | 0.25 | 0.84 |
| Adjusted relevered beta | 0.5 | 0.89 |
002672.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 002672.SZ:
cost_of_equity (7.90%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.5) + 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.